Reference only.
Offer closed.
Income: Australian shares
series 8A & 8B/2011
Two investment opportunities offering:
„„ fixed distributions and a capped maturity price exposed to the performance of
at least one of five Australian shares (series 8A)
„„ lower fixed distributions and a capped maturity price exposed to the
performance of at least two of five Australian shares (series 8B).
Combined financial services guide
and product disclosure statement
Issued by
Deutsche Managed Investments Limited
(which is not an Authorised Deposit-taking Institution authorised
under the Banking Act 1959 nor regulated by APRA)
ABN 55 118 336 584, AFSL 330531
23 September 2011
www.dbaccess.db.com
Important information
Issuer
Deutsche Managed Investments Limited ABN 55 118 336 584,
AFSL 330531 (DMIL) issued this combined product disclosure
statement (PDS) and financial services guide (FSG). DMIL is
regulated by the Australian Securities and Investments Commission
(ASIC) under its Australian financial services licence (AFSL) issued
under the Corporations Act 2001 (Cth) (Corporations Act).
We and you
When we refer to we, us or our, we mean DMIL. When we refer
to you or your, we mean whoever is named in the application,
and when we’ve issued the certificates we mean whoever is
entered on the register as the certificate holder. If there’s more
than one for any obligation:
„„ you owe us, you means each person separately and all of
them jointly
„„ we owe you, we can fulfil our obligations by satisfying our
obligations to any one of you.
Certificates
The offer is for certificates, which are deferred purchase agreements.
The certificates are securities under chapter 7 of the Corporations Act.
Our certificate obligations are separate and independent, owed directly
to you and unsecured. You can’t enforce or share the benefit of a
certificate held by another person. The certificates won’t be listed or
displayed on any securities exchange.
Not a guarantee or a deposit
The certificates are: unsecured obligations of ours; carry risk; and
their performance or repayment of capital invested (issue price
paid) isn’t guaranteed by us, Deutsche Bank AG, Sydney branch
ABN 13 064 165 162 (Deutsche Bank), or any other entity. The
certificates aren't a deposit of ours and aren’t a deposit with, or
other liability of, Deutsche Bank. Deutsche Bank has agreed to make
payments or deliver assets to us (or at our direction) equivalent to the
payments or deliveries we must make to you under the certificates.
We’ve directed Deutsche Bank to make those payments and deliveries
to you on our behalf, and it has agreed. If it doesn’t, we remain
obliged to do so. We can’t cancel that direction. You can only demand
payment or delivery of assets from us, not Deutsche Bank.
Entire agreement
The terms in this PDS, FSG and application form are the entire
agreement between you and us and replace any previous agreement.
No personal advice
This PDS and FSG aren’t investment or tax advice and are general
information only. They don’t take into account your own financial
needs, investment goals or circumstances. Before investing you
should read all of the PDS and the FSG to make sure you understand
the investment and the risks you’ll be exposed to, given your own
circumstances. Please speak to your financial, legal and tax advisers.
Complex product
The certificates are complex financial products. You shouldn’t invest if
you don’t fully understand the investment and this PDS and FSG.
No cooling off
You can’t get a refund of your application amount if you change your
mind about investing.
Australian offer only
This offer is made only to people receiving this PDS and the FSG,
including electronic copies, in Australia. If you’ve received this PDS
outside Australia, you might be subject to non-Australian laws that
restrict its distribution.
2
Income: Australian shares
series 8A & 8B/2011
Updates
If information in this PDS or FSG changes and the change:
„„ isn’t materially adverse to investors, we may publish it at
www.dbaccess.db.com, or you can ask us for a free paper copy
„„ is materially adverse to investors and happens before issue, we'll
issue a supplement to this PDS and FSG and give you a copy.
If it happens after the certificates are issued, we’ll notify you of
the change.
References
For these certificates:
reference index means each of the shares as described in the
‘Offer summary’
share refers to the individual shares or stapled securities in the
reference index
amend includes vary or replace
business day means a day when the Australian Securities Exchange
(ASX) and banks are open for trading in New South Wales. If
something is to be done on a day that isn’t a business day, then it’ll be
done on the next business day (unless we state differently)
a document includes any variation or replacement of it
insolvency applies when a person is insolvent or an insolvent
under administration or has a controller appointed, as defined in the
Corporations Act, in receivership, in receivership and management, in
liquidation, in provisional liquidation, under administration, wound up,
subject to any arrangement, assignment or otherwise unable to pay
debts when they fall due
law means common law, principles of equity and parliamentary
laws, including regulations and other instruments made under
parliament, any laws, consolidations, amendments, re-enactments or
replacements of any of them and any applicable rules of a licensed
financial market
a person includes an individual, a firm, a body corporate, an
unincorporated association and an authority and includes the
person’s successors, permitted assigns, substitutes, executors
and administrators
taxes means taxes, levies, imposts, charges and duties imposed
by any authority with any related interest, penalties, fines and
expenses, except if imposed on or calculated in regard to net income
of any party. It includes goods and services taxes and stamp and
transaction duties
time is the time in Sydney, unless we state differently
the words including, for example or such as, when introducing
an example, don’t limit the meaning of the words with examples of a
similar kind
$ or money means amounts in Australian dollars, unless we
state differently.
Contents
Part 1 Income: Australian shares – series 8A & 8B/2011
Why invest?
6
Offer summary 8
What are the risks? 10
What are you investing in?
13
How does it work? 15
Part 2 General terms
How do you invest?
22
Distributions and maturity
23
Adjustments and early termination
25
Withdrawals, transfers and mortgages
28
Communication 29
Other things
30
Tax opinion 32
Consent
40
About us
41
Financial Services Guide
42
Applying to invest in Income: Australian shares – series 8A & 8B/2011
How to apply 43
Application form
47
dbaccess certificates
3
Part 1
Income: Australian shares –
series 8A & 8B/2011
dbaccess certificates
5
Why invest?
Are you looking for an investment that pays regular income rather than potential capital growth? With
Income: Australian shares – series 8A & 8B/2011 you can choose from two 15-month investments,
offering fixed, monthly distributions.
Fixed annual distribution rate1
series A
at least 15.40% pa
series B
at least 8.50% pa
The maturity prices for both investments will depend on the share price performance of CSL, Macquarie, Newcrest,
OZ Minerals and Wesfarmers. These five Australian companies are currently among the top 100 entities, by market
capitalisation, listed on the Australian Securities Exchange (ASX).2 You might be interested in an investment that offers
distributions that could be higher than the total return3 from investing in these shares directly – if you believe their
share prices will be at least 73% of their start value at the end of the 15-month-investment term.
The maturity prices for each series will be capped at $1.00 regardless of any increase in the share prices, and it could
be less. They’ll depend on the performance of each share at maturity. If, at maturity, the share price of:
„„
one or more share prices is less than 73% of its start value (series A), or
„„
two or more share prices are less than 73% of their start value (series B)
your maturity price will be based on the share performance of the lowest performing share at maturity, and will be
less than $0.73 per certificate.
If the maturity amount is more than zero, you’ll get shares in Wesfarmers – unless you ask us to sell them for you to
receive cash instead.4
If you’re looking for income over the 15-month-investment term, these are two easy-to-acquire investment solutions.
The bottom line
Get a 15-month investment with fixed, monthly distributions. If your maturity amount is more than zero,
you’ll get Wesfarmers shares after maturity (unless you ask us to sell them for you to get cash instead).
We decide the distribution rate on the issue date based on various factors. We’ll only issue the certificates if the distribution rate on the
issue date is equal to or greater than the minimum rate (15.40% pa for series A and 8.50% pa for series B).
2
As at the date of this PDS.
3
Including from capital growth, dividends and any franking benefits.
4
The number of Wesfarmers shares you get will depend on their price and your maturity amount. We can substitute the delivery assets at
any time at our discretion, although it isn’t our general intention.
1
6
Income: Australian shares
series 8A & 8B/2011
5 reasons to invest
1.
You’ll get fixed, monthly, cash distributions during your investment – at least 15.40% pa from
series A or 8.50% pa from series B.
2.
You‘re interested in an investment that could offer distributions higher than total returns5 from
investing in the shares directly.
3.
You believe the share prices of each of the shares for series A, or at least four of the five
shares for series B, won’t fall by more than 27% at maturity.6
4.
They’re easy-to-acquire, 15-month investments with exposure to a basket of five
Australian shares.
5.
If your maturity amount is more than zero, you’ll get Wesfarmers shares.
Why this might not suit you
1.
You don’t think each share for series A, or at least four of the five shares for series B, will be worth
at least 73% of their start value at maturity.
2.
You think the total returns7 from investing directly in the shares over the 15-month-investment
term could be more than 15.40% pa for series A or 8.50% pa for series B.
3.
You might need to withdraw or you don’t want an investment that could terminate early, with a
potential loss.
4.
You want capital protection.
5.
You want diversified exposure to the Australian share market.
This list isn’t comprehensive and doesn’t take into account your personal circumstances or show
the value you could receive from an alternative investment. dbaccess certificates are unlisted,
complex structured investments and you could lose all or part of your investment, so certificates should
only be a small part of your total investment portfolio. When considering potential returns for your
investment you should include any fees or costs related to the investment (eg adviser service fees). You
should seek financial, legal and tax advice that considers your goals and financial situation before you
decide to invest.
Including from capital growth, dividends and any franking benefits.
The maximum maturity price for both series is $1.00; you won’t receive more regardless of any gains in the share prices at maturity.
7
Including from capital growth, dividends and any franking benefits.
5
6
dbaccess certificates
7
Offer summary
Here are the specific terms for Income: Australian shares - series 8A & 8B/2011. Part 2 explains the general terms that
apply to investing in these and other certificates we issue from time to time. Together parts 1 and 2 of this PDS, the FSG,
and the application form, contain the terms you agree to if you invest.
Timeline
Offer opens
27 September 2011
Offer closes
5pm, 18 October 2011.
We may change this by publishing a new close date at www.dbaccess.db.com.
Application payment
If you’re paying by cheque you’ll need to submit it with your application before the offer closes. If you choose direct
debit on your application form we’ll debit your account five business days after the offer closes.
Expected issue
1 November 2011
Distributions
We’ll calculate 15 distributions payable monthly after the issue date (expected to start on 1 December 2011 and end
on the maturity date).
Maturity
15 months after issue, expected to be 1 February 2013
Key information
dbaccess certificates
Income: Australian shares – series 8A & 8B/2011
The certificates are deferred purchase agreements where you agree to buy delivery assets, which will be delivered
to you after maturity. The delivery assets are fully paid, ordinary shares in Wesfarmers Limited (Wesfarmers) or, if
we decide, another delivery asset (our general intention isn't to replace them). The number of delivery assets you’re
entitled to will depend on their price and your certificates’ maturity amount. As soon as practical after maturity, these
delivery assets will be transferred to you (unless you ask us to sell them for you instead).
The certificates won’t be listed or displayed on any securities exchange.
Issuer
Deutsche Managed Investments Limited
Issue price
$1.00 per certificate
Total investment amount Calculated as the number of certificates you hold, multiplied by the issue price. You pay the total investment amount
in one upfront payment.
Minimum investment
10,000 certificates in series A or B (and in multiples of 1,000 above that)
Minimum offer
subscription
We might not issue certificates for a series if the aggregate amount of applications we receive is less than $2 million
for that series.
Distribution amount
We’ll calculate distribution amounts each distribution date by multiplying the fixed, monthly distribution rate for
the relevant series by the $1.00 issue price per certificate. So you’ll get the same amount monthly regardless of
the number of days in the month. Distributions aren’t franked. You’ll receive distributions on the distribution dates
regardless of how the reference index performs, unless the certificates terminate early.
Distribution rate
We’ll fix the distribution rates for both series on the issue date.
Series
Minimum annual rate
Minimum monthly rate
A
15.40% pa
1.2833333% (rounded to seven decimal places)
B
8.50% pa
0.7083333% (rounded to seven decimal places)
We’ll decide the distribution rates based on various factors including: the volatility and level of the reference index,
interest rates, and dividend assumptions. We’ll only issue the certificates if the distribution rate is equal to or greater
than the minimum rate listed for the respective series. We’ll let you know the rate when we set it. For example, if the
issue date was the date of this PDS, the distribution rate would be 18.50% pa for series A and 10.70% pa for series B.
Delivery assets
We intend to deliver Wesfarmers shares8 for your certificates after maturity. For information about the company and
share prices visit www.wesfarmers.com.au and www.asx.com.au (ASX code: WES).
Reference index
The reference index for series A and B is the following shares:
Name
Website
CSL Limited (CSL)
CSL
www.csl.com.au
Macquarie Group Limited (Macquarie)
MQG
www.macquarie.com.au
Newcrest Mining Limited (Newcrest)
NCM
www.newcrest.com.au
OZ Minerals Limited (OZ Minerals)
OZL
www.ozminerals.com
Wesfarmers Limited (Wesfarmers)
Share prices are published at www.asx.com.au.
WES
www.wesfarmers.com.au
Share price
The ASX closing price of each individual share in the reference index on any business day.
Start value
The ASX closing price of each individual share in the reference index on the issue date.
End value
The ASX closing price of each individual share in the reference index on the maturity date.
8
8
ASX code
The number of Wesfarmers shares you get will depend on their price and your maturity amount.
Income: Australian shares
series 8A & 8B/2011
Share performance
Calculated by dividing the share price by the start value.9 As a formula:
share performance (%) = share price
start value
Maturity price
The maturity price will only be calculated on the maturity date. You’ll receive an early termination price (which may be
zero) if the certificates terminate before maturity. The maturity price will depend on the share performance of each of
the shares in the reference index at maturity.
Series A
If, at maturity, the share prices of:
„„ one or more shares in the reference index is less than 73% of its start value, the maturity price will be based
on the share performance of the lowest performing share at maturity and it will be less than $0.73
„„ all of the shares is at least 73% of their start value, the maturity price will be $1.00.
Series B
If, at maturity, the share prices of:
„„ two or more shares in the reference index are less than 73% of their start value, the maturity price will be
based on the share performance of the lowest performing share at maturity and it will be less than $0.73
„„ at least four of the shares are at least 73% of their start value, the maturity price will be $1.00.
You could lose all of your investment but no more.
Reference index performance
at maturity
Series A maturity price/certificate
Series B maturity price/certificate
For each share in the reference index:
end value ≥ (start value x 73%)
$1.00
$1.00
For any single share in the
reference index:
end value < (start value x 73%)
equals the lowest share performance
at maturity x $1.00.
$1.00
This will be less than $0.73 per
10
certificate (ie between $0 and $0.72 ).
For any two (or more) shares in the
reference index:
end value < (start value x 73%)
equals the lowest share performance
at maturity x $1.00.
This will be less than $0.73 per
certificate (ie between $0 and $0.7211).
equals the lowest share performance
at maturity x $1.00.
This will be less than $0.73 per
certificate (ie between $0 and $0.72).12
Maturity amount
Calculated by multiplying the number of certificates you hold at maturity, by the maturity price.
Early termination
We can terminate your certificates if there’s an early termination event. You can terminate your certificates by
requesting to withdraw. If the certificates terminate early, we’ll decide the early termination date and the early
termination price, which may be zero. We’ll pay you the termination amount (if any) in cash and you won’t have the
option of receiving delivery assets. See ’Adjustments and early termination’.
Withdrawals
We’ll accept withdrawal requests at our discretion. Requests we receive by 5pm on the 15th day of each month will
be processed that month. Requests we receive after that will be processed the following month unless we decide to
process them earlier. If we accept your withdrawal request it will be treated as an early termination event and we’ll
decide the early termination date and the early termination price, which could be zero. See ’Withdrawals, transfers
and mortgages’.
Minimum withdrawal
You can ask to withdraw all of your certificates. If you want to withdraw part of your investment the minimum number
of certificates you can ask to withdraw is 5,000 per series, providing you continue to hold at least 10,000 certificates in
that series.
Fees and other costs
Fees
You won’t pay us application or ongoing fees.13
Commission
Deutsche Bank may pay commissions to approved people (including your financial adviser, dealer groups and
distributors). They aren’t additional amounts for you to pay.
Upfront commission
Up to 2.2% (including GST) of the application amount to your financial adviser
Up to 1.1% (including GST) of the application amount to other approved people
Ongoing commission
nil
Waiver
Some advisers might waive some or all of their commissions. If an adviser chooses to waive their commission and
checks the box in your application form, you’ll get more certificates based on the GST exclusive amount waived.
Commissions to the other approved people won’t be waived.
Goods and services tax
(GST)
These commissions include 10% GST. For example the maximum 2.2% commission payable to your financial
adviser includes 0.2% GST. You won’t pay this GST. If an adviser waives their commission and you receive additional
certificates, this won’t have GST implications for you.
Values of the shares are subject to adjustment in certain circumstances. See ‘Adjustments and early termination’.
The maturity price has been rounded down to the nearest cent for this example, but won’t be when we calculate the maturity price.
11
The maturity price has been rounded down to the nearest cent for this example, but won’t be when we calculate the maturity price.
12
The maturity price has been rounded down to the nearest cent for this example, but won’t be when we calculate the maturity price.
13
Any income we or Deutsche Bank may receive from these certificates is included in the issue price for the certificates.
9
10
dbaccess certificates
9
What are the risks?
Investing in these certificates carries risks. These are only some of
the risks. They don’t take into account your own financial needs,
investment goals or financial circumstances. Before investing read
all of the PDS to make sure you understand the risks for you and
speak to your financial, legal and tax advisers.
Specific risks for Income: Australian shares –
series 8A & 8B/2011
No capital protection
The certificates aren’t capital protected and you could lose some or all of
your investment. At maturity, you’ll get less than $0.73 per certificate if
you invest in:
„„
series A and the share price of any share in the reference index isn’t at
least 73% of its start value, or
„„
series B and the share prices of two or more shares in the reference
index aren’t at least 73% of their start values.
This will be the case even if some or all the other share prices
have increased.
Concentration
Your investment isn’t diversified so:
„„
your maturity price isn’t based on an average of the five share prices
in the reference index. At maturity, your maturity price will reflect the
performance of the lowest performing share (excluding dividends and
any franking benefits) if the shares prices of:
——
one or more of the shares (in the reference index) isn’t at least 73%
of its start value (series A), or
——
two or more of the shares (in the reference index) aren’t at least 73%
of their start value (series B)
„„
the reference index is made up of five shares and if there’s an
adjustment to any of them, your investment could be terminated with a
potential loss
„„
you won’t get a basket of shares after maturity – you’ll only get
Wesfarmers shares after maturity.14
Maximum maturity price
Your maturity price is capped and won’t be more than the $1.00 issue price
regardless of how the shares in the reference index perform. You could
receive more (or less) from investing directly in the shares in the reference
index instead. When we calculate the maturity price we use share prices at
maturity only.
14
10
Income: Australian shares
series 8A & 8B/2011
The number of Wesfarmers shares you get will depend on their price and your maturity
amount. We can substitute the delivery assets at any time at our discretion, although it
isn’t our general intention.
General risks
The following risks apply to all certificates we issue from
time to time.
Early termination
The certificates will terminate if there’s an early
termination event. If the certificates terminate early for
any reason we’ll decide the early termination price and
you’ll almost certainly receive a different amount from
what you would have received if it hadn’t happened
and you’d held the certificates to maturity. You could
receive less than the amount you paid or you might
not receive anything.
Adjustments
If there’s an adjustment event we can calculate a
reference index value differently; adjust the terms or
number of your certificates; or terminate the certificates.
This may affect the value of your certificates as well as
the timing of our obligations to you, including delivery
of the delivery assets.
Withdrawals and liquidity
There’s no established market for trading
the certificates.
We can reject your withdrawal application or restrict
when you withdraw. If we accept your withdrawal
request it will be treated as an early termination event
and we’ll decide the early termination date and early
termination price. You’ll almost certainly receive a
different amount from what you would have received
if you’d held the certificates to maturity. You could
receive less than the amount you paid or you might not
receive anything.
Tax
If you don’t plan to hold the delivery assets as a longterm investment, the Australian Taxation Office (ATO)
might consider the certificates are held on revenue
account. So you might not get any capital gains
concession, which you could be entitled to if you’d
held the certificates on capital account for more than
12 months. This might happen if the ATO decides that
when you invested, you intended to withdraw, walk
away, transfer before maturity or sell the delivery assets
immediately after delivery.
If you invest after the initial offer closes you won't hold
certificates for the whole investment term and your
15
issue price may be different. These factors could impact
the tax treatment of your investment.
The certificates are deferred purchase agreements
(DPAs). The ATO sets out its tax treatment of DPAs in
two of its tax determinations. These determinations
might not apply to certificates with features that
differ from the DPAs described in the ATO’s tax
determinations. Although the certificates offered in this
PDS have certain features which differ from the DPAs
described in the tax determinations, this is not expected
to result in an adverse tax treatment for you.
There are more tax considerations. You should read the
‘Tax Opinion’ and seek professional tax advice regarding
your circumstances.
Market
The delivery asset purchase price and the reference
index value can go up and down. Global markets
can be impacted by events including: industrial
disruptions, political instability, economic instability
(global recession, inflation, interest rate and currency
fluctuations), legislative and regulatory changes,
corporate fraud or financial markets disruption. These
can affect reference index values, the certificate
maturity price and the price of the delivery assets
transferred to you or sold for you.
No ownership rights of the reference index or the
delivery assets
Under the certificates, you don’t own the reference
index or the delivery assets during the investment life.
You won’t receive any dividend payments or other
payments that owners of these assets might receive.
You won’t have the voting or other rights that owners
of these assets might have. When you’re delivered the
delivery assets after maturity15 you’ll have the same
rights as owners of the delivery assets.
Reference index performance
You shouldn’t consider the historical performance
of the reference index as an indication of its future
performance. The share performance is calculated
by comparing the share prices on particular dates.
Regardless of the share prices around the particular
dates (which can move up and down), we only use
the share price on particular dates to calculate the
share performance.
We can substitute the delivery assets at any time at our discretion, although it isn’t our general intention.
dbaccess certificates
11
Delivery assets
The delivery assets are subject to market risks and other risks inherent in owning
listed financial instruments. For example, their market value could fall between the
time we buy them for you and the time they’re transferred to you or sold on your
behalf. They might not be very liquid so you may not be able to sell them when
you’d like to.
You could be delivered assets different to those listed in the ‘Offer summary’ if
we decide to substitute them. Although it isn’t our intention, we might decide it’s
not practical to transfer them to you or sell them for you. We’ll only substitute
the delivery assets with securities or managed investment products that are, at
maturity, in a class of financial products that are constituents of the index known
as the S&P/ASX 200 index.
Time value of money
The value of a dollar depends on when it’s received. For example, the value of a
dollar received today may be higher than the value of a dollar received in a year's
time. The difference between these two values is determined by the ‘opportunity
cost’ of investing the dollar received today for a year, versus the dollar received
in a years’ time. This is often referred to as the ‘time value of money’. This means
money from your investment (from distributions, at maturity or early termination)
may be worth less to you when you receive it, than if you’d received it today.
Percentage returns or examples in this PDS don’t consider the time value of
money or show the value you could receive from an alternative investment.
Deutsche Bank Group risk
Our obligations under the certificates are unsecured. The certificates aren't a
deposit of ours and don’t represent a deposit with or other liability of Deutsche
Bank. They rank equally with our existing unsecured debt subject to insolvency
and similar laws affecting creditors’ rights. The certificate performance or
repayment of capital invested (issue price paid) isn’t guaranteed by us, Deutsche
Bank or any other entity. Deutsche Bank has agreed to make payments or deliver
assets to us (or at our direction) equivalent to the payments or deliveries we must
make to you under the certificates. We’ve directed Deutsche Bank to make those
payments and deliveries to you on our behalf, and it has agreed. If it doesn’t, we
remain obliged to do so. We can’t cancel that direction. You can only demand
payment or delivery of assets from us, not Deutsche Bank.
This doesn’t remove the risk that we don’t meet some or all of our obligations to
you. If this happens (for example, if we were to become insolvent) you might not
have all your delivery assets transferred to you; or receive all the cash from their
sale proceeds. In the worst case, you won’t receive any money or delivery assets.
You could lose all of your investment.
Potential conflicting interests
We and other Deutsche Bank Group members could have conflicting interests
from our roles including issuer, arranger, nominee, broker or custodian and hedge
provider. We may, in other businesses for example, trade in financial products that
make up the reference index or instruments related to those financial products.
These transactions could negatively impact the reference index value at any time.
12
Income: Australian shares
series 8A & 8B/2011
What are you investing in?
You’re investing in certificates with a 15-month-investment term, paying fixed, monthly distributions.
If your maturity amount is more than zero, you’ll get Wesfarmers shares16 (unless you ask us to sell
them for you to get cash instead). Wesfarmers shares are currently in the top 20 constituents by
market capitalisation in the S&P/ASX 200 index, and are among the most liquid, Australian shares.17
Your certificates’ maturity price will depend on the performance of each share in the reference index at maturity.
You’ll have exposure to negative price performances18 of each share in the reference index but your maturity price is
capped – it won’t be more than $1.00 regardless of any gains in those share prices.
How have the shares performed?
The following graph shows the historical share performance of the shares on a rolling basis over consecutive,
15-month periods. Dividends aren’t assumed to be reinvested, and the prices have been adjusted for certain
corporate events (consistent with market practice).
The tables show how the certificates would have performed in the past. They show the percentage of times the
share price at maturity of:
„„
one or more shares was less than 73% of its start value (series A)
„„
two or more shares were less than 73% of their start value (series B).
The graph and tables are based on the historical performance of the shares over 2,194 consecutive 15-month
periods, starting every day from 6 September 2001 (maturing 6 December 2002) to 4 June 2010 (maturing
4 September 2011).
The use of past performance is illustrative only and doesn’t represent actual or any likely performance, which may
differ materially. Past performance isn’t an indicator of future performance. Returns aren’t guaranteed and you could
lose all of your investment.
400%
350%
300%
250%
200%
150%
100%
50%
CSL performance
MQG performance
NCM performance
OZL performance*
WES performance
Jun 11
Dec 10
Jun 10
Dec 09
Jun 09
Dec 08
Jun 08
Dec 07
Jun 07
Dec 06
Jun 06
Dec 05
Jun 05
Dec 04
Jun 04
Dec 03
Jun 03
0%
Dec 02
Reference index performance
15-month rolling performance of the shares
Barrier
* OZ Minerals was granted suspension from quotation on ASX at its own request from 28 November 2008 to 16 February 2009. In the graph above,
this period is reflected using the closing price of OZ Minerals on 27 November 2008. The graph scale only shows performance levels up to 400%.
OZ Minerals had 15-month share performance above that level which is shown as performance of 400% in the graph.
Source: DMIL
The number of Wesfarmers shares you get will depend on their price and your maturity amount. We can substitute the delivery assets at
any time at our discretion, although it isn’t our general intention.
17
As at the date of this PDS.
18
Your maturity price will reflect the performance of the lowest performing share at maturity if, at maturity,the share price of one or more
of the shares is less than 73% of its start value (series A) or, two or more share prices are less than 73% of their start value (series B).
16
dbaccess certificates
13
Historical performance over consecutive 15-month periods, starting every day from 6 September 2001
(maturing 6 December 2002) to 4 June 2010 (maturing 4 September 2011)
14
Series A reference index performance at maturity
Series A outcome
All share prices are equal to or above 73% of their start value.
maturity price equals the $1.00 issue price 64.08%
One or more share prices are below 73% of their start value.
maturity price is less than $0.73
35.92%
Series B reference index performance at maturity
Series B outcome
% of time
At least four share prices are equal to or above 73% of their start value
at maturity.
maturity price equals the $1.00 issue price 81.45%
Two or more share prices are less than 73% of their start value.
maturity price is less than $0.73
Income: Australian shares
series 8A & 8B/2011
% of time
18.55%
How does it work?
These examples demonstrate how the investments work. They may help you
decide if they’re suitable for you. They are hypothetical only. They don’t:
„„ represent actual, forecast or any likely performance, which may
differ materially
„„ reflect the value of the certificates before or at maturity
„„ reflect early termination prices
„„ consider the time value of money
„„ show the value you could receive from an alternative investment
„„ consider the tax consequences of your investment (you should read
the ‘Tax opinion’)
„„ include any fees, costs and taxes you might pay, unless specifically stated.
(You should include these when considering the potential returns from
this investment.)
The examples aren’t investment or tax advice so you should speak to your
financial, legal and tax advisers before investing. Returns aren’t guaranteed
and you could lose all of your investment.
These examples show you:
1. What would happen if your adviser waives their upfront commission
2. How we’ll calculate your distributions
3. How we’ll calculate the maturity price
4. What you’d get at maturity
5. What would happen if you decide to withdraw
6. What would happen if we terminate the certificates early.
Example 1: What would happen if your adviser waives their
upfront commission?
If you invested $50,000 and the maximum commission payable by Deutsche
Bank to your adviser was 2.2% of the application amount (including GST),
you’d be issued with 50,000 certificates and your adviser would ordinarily
receive a maximum commission of $1,100. The commission includes 10%
GST – equal to $100 or 0.2% of the application amount.
If your adviser waived that upfront commission, you’d receive 51,000
certificates while only paying your $50,000 application amount. The 1,000
additional certificates are equivalent to an application amount of $1,000. This
is equal to the GST-exclusive amount of the waived commission ie $1,100
commission minus $100 GST, or 2.2% commission minus 0.2% GST.
dbaccess certificates
15
In the following examples, we assume (unless otherwise indicated):
„„
the certificates were issued on 1 November 2011
„„
you’ve acquired 50,000 certificates and hold them to maturity (1 February 2013)
„„
you have a total investment amount of $50,000.00 (50,000 certificates multiplied by $1.00)
„„
the distribution rate is set at the minimum level of 15.40% pa (1.2833333%19 per month) for series A
and 8.50% pa (0.7083333%20 per month) for series B.
Example 2: How will we calculate your distributions?
If you invested in series A your fixed, monthly distribution would be $0.012833321 (15.40% divided by 12 months)
for each certificate you held. So you’d receive $641.6622 cash monthly. At maturity that would total $9,624.90. This
is calculated by multiplying the $641.66 monthly distribution on your 50,000 certificates, by 15 months.
If you invested in series B your fixed, monthly distribution would be $0.007083323 (8.50% divided by 12 months) for
each certificate you held. So you’d receive $354.1624 cash monthly. At maturity that would total $5,312.40. This is
calculated by multiplying the $354.16 monthly distribution on your 50,000 certificates, by 15 months.
Example 3: How do we calculate the maturity price?
The maturity price will depend on whether, at maturity, the closing price of any of the shares (for series B, any two
of the shares) is less than 73% of its start value (in other words, whether its share price has fallen by more than 27%
since the certificates were issued).
Scenario 1: At maturity all share prices are equal to or above 73% of their start value.
share performance at maturity (end value/start value)
CSL
Macquarie
Newcrest
73.50%
82.40%
103.90%
OZ Minerals Wesfarmers
89.30%
80.00%
Your maturity price would be $1.00 for series A and B because, at maturity, all shares retained 73% of their start
value. Your maturity amount would be $50,000. This doesn’t include the final distribution you’d receive at maturity.
The bottom line: If you invested in series A, your $9,624.90 gain would be made up of the cash distributions
you received during the investment because the maturity price is capped at the $1.00 issue price. The gain
represents a total return over your 15-month-investment term of 19.25%25 (ie 15.40% pa) above your $50,000
original investment.
If you invested in series B, your $5,312.40 gain would be made up of the cash distributions you received during the
investment because the maturity price is capped at the $1.00 issue price. The gain represents a total return over
your 15-month-investment term of 10.62% (ie 8.50% pa) above your $50,000 original investment.
Scenario 2: At maturity one of the share prices is less than 73% of its start value.
business day
31 January 2013
share performance (end value/start value)
CSL
Macquarie
Newcrest
OZ Minerals
Wesfarmers
102.10%
125.20%
112.20%
73.40%
105.60%
maturity: 1 February 2013
102.80%
126.70%
114.10%
72.00%
110.30%
2 February 2013
101.90%
129.30%
114.80%
73.20%
123.80%
You can see that on the maturity date (1 February 2013), the OZ Minerals share price was less than 73% of its start
value. But it wouldn’t have been on 31 January 2013 or 2 February 2013.
Rounded to seven decimal places in this example.
Rounded to seven decimal places in this example.
21
Rounded to seven decimal places in this example.
22
We pay you the monthly distribution amount rounded down to the nearest cent.
23
Rounded to seven decimal places in this example.
24
We pay you the monthly distribution amount rounded down to the nearest cent.
25
Returns shown in the examples are rounded to two decimal places.
19
20
16
Income: Australian shares
series 8A & 8B/2011
If you invested in series A your maturity price would be $0.72 for each certificate because at maturity one share
price (OZ Minerals) was less than 73% of its start value. The maturity price is calculated by multiplying the lowest
share performance of 72% by $1.00. The maturity amount would be $36,000 (50,000 certificates multiplied by
$0.72). This doesn’t include the final distribution you’d receive at maturity.
If you invested in series B your maturity price would be $1.00 because at maturity only one share was less than 73%
of its start value.
The bottom line: If you invested in series A, your $4,375.10 loss would be made up of $9,624.90 cash distributions
you received during the 15-month-investment term, less the $14,000 loss at maturity. This represents a loss of
8.75% on your $50,000 original investment. You’d make this loss:
„„ even though four of the five shares had positive share performance at maturity
„„ because the maturity date was 1 February 2013. If it had been 31 January 2013 or 2 February 2013, all share
prices would have been at least 73% of their start value, so your maturity price would have been $1.00 and your
maturity amount would have been $50,000.
If you invested in series B, your maturity amount would be $50,000 and you’d make a gain of $5,312.40 (calculated
in the same way as scenario one).
Scenario 3: At maturity two or more share prices are less than 73% of their start value.
share performance at maturity (end value/start value)
CSL
Macquarie
Newcrest
OZ Minerals
Wesfarmers
77.30
72.80%
100.90%
72.00%
84.70%
You can see that on the maturity date, the share prices of two shares (Macquarie and OZ Minerals) were less than
73% of their start value. The maturity prices for both series would reflect the lowest share performance at maturity
(72% for OZ Minerals) because two or more of the share prices (Macquarie & OZ Minerals) were less than 73% of
their start value. The maturity amount for each series would be $36,000 (50,000 certificates multiplied by $0.72).
This doesn’t include the final distribution you’d receive at maturity.
The bottom line: If you invested in series A, your $4,375.10 loss would be made up of $9,624.90 cash distributions
you received during the 15-month-investment term, less the $14,000 loss on maturity. This represents a loss of
8.75% on your $50,000 original investment.
If you invested in series B, your $8,687.60 loss would be made up of $5,312.40 cash distributions you received
during the 15-month-investment term, less the $14,000 loss on maturity. This represents a loss of 17.38% on your
$50,000 original investment.
Example 4: What would you get at maturity?
You’re entitled to the delivery assets at maturity.26 The number of delivery assets you get depends on their price and
your maturity amount. They’ll be transferred to you, unless you ask us to sell them for you so you can receive cash.
How many delivery assets would you get?
Assume:
„„ you held 50,000 series A certificates at maturity
„„ the maturity price for your certificates is $1.00
„„ your maturity amount would be $50,000 (from scenario 1 in example 3)
„„ expenses are $60. These represent the costs or taxes that we or our agents incur, or expect to incur, with the
purchase and transfer of the Wesfarmers shares, which we decide (in our discretion) to pass on to you. At
the date of this PDS, we don’t expect there to be any expenses. As this might change before maturity, we’ve
included expenses in this example
„„ after maturity you’d receive the Wesfarmers shares, which were bought at a volume-weighted-average purchase
price27 of $29.65 per share.
26
27
We can substitute the delivery assets at any time at our discretion, although it isn’t our general intention.
For example assume we bought a total of 10,000 delivery assets in two transactions. If we bought 7,500 delivery assets at a purchase
price of $5.81 and 2,500 at a purchase price of $5.85 per asset, the volume-weighted-average price for your delivery assets would be
$5.82, calculated as [(7,500 x $5.81) + (2,500 x $5.85)]/10,000.
dbaccess certificates
17
Calculation step
Explanation
Calculations
Number of
Wesfarmers shares
We calculate this by dividing the maturity amount, minus
expenses, by the Wesfarmers share purchase price, rounded
down to the nearest whole number.
Wesfarmers Limited shares:
($50,000 – $60)/$29.65
= 1684 shares
As a formula:
number of Wesfarmers shares
= maturity amount - expenses
purchase price
Remainder
We calculate the remainder by multiplying the Wesfarmers share
purchase price by your number Wesfarmers shares, then subtract
that amount from your maturity amount after expenses.
= ($50,000 – $60.00) – ($29.65 x
1684)
We pay this to you in cash if the remainder is more than $50.00.
(we keep this as it is less than $50)
= $9.40
The bottom line: You’d receive 1684 Wesfarmers shares with a value of $49,930.60. We’d transfer the Wesfarmers
shares to you as soon as practical but there’s a risk they could have fallen in value by the time they’re transferred.
You’d make a gain of $9,555.50 on your series A certificates, calculated at maturity. This would be calculated by:
„„
subtracting the $60 expenses from the $50,000 maturity amount
„„
subtracting the remainder of $9.40
„„
subtracting the $50,000 total investment amount
„„
adding total cash distributions of $9,624.90.
This represents a total return over your 15-month investment of 19.11% above your $50,000 total
investment amount.
What would you get if you ask us to sell the Wesfarmers shares?
Assume:
„„
you want cash from the sale of the Wesfarmers shares
„„
you’re entitled to 1684 Wesfarmers Limited shares (from the previous scenario) and we sell these for you at a
volume-weighted-average price of $29.35 per share. The sale proceeds would be $49,425.40
„„
expenses are $50, which represent any costs or taxes that we or our agents incur, or expect to incur, from selling
the shares or paying the sale proceeds to you, which we decide (in our discretion) to pass on to you. At the date
of this PDS, we don’t expect there to be any expenses. As this might change before maturity, we’ve included
expenses in this example.
You’d receive $49,384.80 cash, calculated by:
„„
subtracting expenses of $50 from the $49,425.40 we received from selling your shares
„„
adding back the $9.40 remainder calculated in the previous example.
The bottom line: You’d receive $49,384.80 cash from the sale of the Wesfarmers shares. We’d sell them as soon
as practical after maturity but they could have fallen in value from when we bought them to when we sold them.
You’d make a total gain of $9,009.70 on your series A certificates ($49,384.80 cash sale proceeds plus $9,624.90
distributions, less $50,000 investment). This represents a total return over the 15-month-investment term of 18.02%
above your total investment amount.
18
Income: Australian shares
series 8A & 8B/2011
Example 5: What would happen if you decide to withdraw?
Assume you invested in series A intending to hold the delivery assets as a long-term investment. However due to
a change in personal circumstances, you want to withdraw them on, 21 September 2012 (after almost 11 months).
We have the discretion to accept your withdrawal request. In this case, we agree to process your withdrawal, which
makes it an early termination event.
We’d:
„„
determine the early termination date. As your withdrawal was submitted on 21 September (after the monthly
cut-off listed in the ‘Offer summary’) the early termination date would be after 15 October 2012, unless we
decide to process your withdrawal earlier
„„
calculate the early termination price (which may be zero), and
„„
if we determined the early termination price was greater than zero, we’d pay you the early termination amount
within seven days of the certificates terminating.
Assume we decided (in our discretion) the early termination price was $0.25. Your withdrawal amount would be
$12,500, which is calculated by multiplying the $0.25 certificate early termination price by your 50,000 certificates.
As with any early termination event, you’d receive cash without the option of receiving the delivery assets.
You should read the ‘Tax opinion’ and seek your own tax advice if you’re considering withdrawing when you invest
or later.
The bottom line: You’d receive $12,500 on your withdrawal. You would have received 11 monthly distributions
totalling $7,058.26 on your series A certificates. This represents a loss of $30,441.74 below your $50,000
investment. You wouldn’t receive any more distributions or a maturity amount.
Example 6: What would happen if we terminate the certificates early?
Assume you invested in series A and there’s an adjustment event (as described in ’Adjustments and early
termination’). For example one of the shares in the reference index is delisted on 19 August 2012 (after
nine months), and we reasonably decide to terminate the certificates. We’d decide the early termination date
and early termination price (which could be zero).
Assume we decide the certificate early termination price is $0.31. You’d receive your early termination amount in
cash without the option of receiving delivery assets.
Your early termination amount would be $15,500, which is calculated by multiplying the $0.31 certificate early
termination price by your 50,000 certificates.
The bottom line: You’d receive $15,500 cash as your early termination amount. You would have also received nine
monthly distributions totalling $5,774.94 on your series A certificates. This represents a loss of $28,725.06 below
your $50,000 investment. You wouldn’t receive any more distributions or a maturity amount.
dbaccess certificates
19
20
Income: Australian shares
series 8A & 8B/2011
Part 2
General terms
dbaccess certificates
21
How do you invest?
Apply
You can apply by completing the application form, in
the way it describes. You agree to be bound by these
terms if we accept your application.
Invest through a wrap account, if available
If you invest in certificates through a wrap account,
we’ll consider the wrap operator or custodian the
investor, not you. We’re not responsible for operating
the wrap account. If you choose to invest this way,
the wrap account offer document should explain its
services, fees and charges and have the application
form you’ll need to complete (you won’t need to
complete the application form for these certificates as
well). Contact the wrap operator directly.
Can we reject all or part of your application?
We can reject all or part of your application or not
proceed with the offer. For example, we might do this
if your application isn’t correctly completed; we don’t
receive enough applications; or if we receive more
applications than we can issue certificates for. If we
reject all or part of your application, we’ll return your
application amount, or the remainder of your application
amount, with any fees you’ve paid, without interest.
How do you pay your total investment
amount?
Payment upfront or in instalments
The ‘Offer summary’ lists whether your total investment
amount is payable in one upfront payment or in
instalments. When you pay the total investment amount
in one upfront payment you’ll pay it on the application
payment date. If payment of the total investment
amount is in instalments, the timing and amount will be
listed in the ‘Offer summary’.
Paying in instalments
If you’re paying in instalments you’ll pay the first
instalment on the application payment date. For
instalments payable after the issue date, we’ll send
you a reminder at least 20 business days before the
instalment date. The reminder will list the:
22
„„
number of certificates you hold at 4pm on the
business day before the date of the reminder notice
„„
the amount due
„„
the last date for payment.
Income: Australian shares
series 8A & 8B/2011
You’ll need to pay your instalment by the due date.
If you agreed to pay your adviser (or other approved
people) ongoing fees and nominated the fee amount in
section A of your application form, you’ll also need to
pay the fee to us (we’ll forward it to your adviser).
The instalment notice will include details of the bank
account we’ll debit on the instalment payment date if
you’ve chosen this payment method on your application
form. If you want to change your payment method or
bank account details you’ll need to contact us before
the instalment payment date.
After issue, the remaining instalments won’t be
payable if there’s an early termination event before
the instalment date. If you transfer your certificates to
someone else they’ll need to pay any instalments due
after the transfer is registered.
When will your certificates be issued?
If we accept your application and we received it:
„„
before the initial offer closes, we plan to issue your
certificates on the issue date listed in the ‘Offer
summary’, unless we decide to extend the issue date
„„
after the initial offer closes, we’ll issue your certificates
on a date we decide.
We’ll let you know when we issue your certificates.
How many certificates will you be issued?
The number of certificates we’ll issue you with will
equal the sum of:
„„
the number of certificates you requested in your
application (unless your application is rejected in
whole or in part), and
„„
additional certificates equal to the GST-exclusive
amount of any waived commission, divided by the
issue price.
We won’t pay interest on your application amount
before issuing you the certificates. You’ll receive a
rounded down, whole number of certificates and we’ll
keep any application amount remaining after issuing
your certificates.
Issue price
For applications we receive before the initial offer
closes, the issue price of the certificates will be listed in
the ‘Offer summary’. If we allow applications after the
initial offer closes, we’ll let your adviser know the issue
price and when it needs to be paid.
Distributions and maturity
Will you receive distributions?
The ‘Offer summary’ lists whether we pay distributions
during the term and how they’re calculated. We aim to
pay you any distributions as soon as practical after each
distribution date.
What happens at maturity?
We’re obliged to settle your certificates by delivering
the delivery assets, described in the ‘Offer summary’,
to you as soon as practical after maturity. While we may
substitute the delivery assets at any time, our general
intention isn’t to do so. For example, we might need
to substitute the delivery assets if we decide it’s not
practical to transfer them to you or sell them for you.
If we substitute the delivery assets we’ll act in good
faith and a commercially reasonable way and we’ll
replace them with securities or managed investment
products that are, at maturity, in a class of financial
products that are constituents of the index known as
the S&P/ASX 200 index.
We’ll send you a maturity notice and a completion form
at least 20 business days before maturity. The notice will
list the:
„„
number of maturing certificates you hold at 4pm, on
the business day before the date of the notice
„„
maturity date.
Complete the form if you’d like us to sell your delivery
assets and pay you the sale proceeds. Please ensure we
receive it at least five business days before maturity so
it can be processed.
If we don’t get your form in time or it’s not properly
completed, the delivery assets will be transferred to
you. If the delivery assets are listed on the Australian
Securities Exchange, they’ll be recorded on the
issuer sponsored sub-register. You can transfer them
later into your participant sponsored CHESS holding
(which is identified by your own holder identification
number (HIN)) by contacting your broker or dealer.
As soon as practical after maturity, we’ll let you know:
„„
the maturity price
„„
the number and value of delivery assets transferred
to you or the sale proceeds from the delivery assets
28
„„
any remainder from rounding down the number of
delivery assets transferred to you (and if its greater
than $50 the remainder will be paid to you in cash).
If we buy delivery assets to settle maturing certificates
(where a dividend or distribution has been declared on
those assets but not paid), and on the date we transfer
them to you they are ex-dividend or ex-distribution, we’ll
pay you a cash amount (if it’s greater than $50) equal
to the dividend or distribution payable on them. We’ll
pay you as soon as practical after we’ve received the
dividend or distribution amounts (without any applicable
franking credits).
How do we calculate the number of delivery
assets transferred to you?
To calculate the number of delivery assets transferred to
you at maturity we use the terms below:
„„
maturity amount is the number of certificates you
hold at maturity, multiplied by the maturity price
„„
maturity price is calculated using a formula
described in the ‘Offer summary’ and will vary based
on the performance of the reference index described
in the ‘Offer summary’
„„
expenses are the costs and taxes that we or our
agents incur, or expect to incur, with the purchase
and transfer of the delivery assets, which we decide
(acting reasonably) to pass on to you
„„
purchase price is the volume-weighted-average
price28 of the delivery assets we bought to settle
your maturing certificates.
If the delivery asset is a single asset (for example
shares in one company)
We calculate the number of your delivery assets by
dividing the maturity amount, minus expenses, by the
delivery asset purchase price. We round down the number
of delivery assets to the nearest whole number.
As a formula:
number of delivery assets = maturity amount – expenses
purchase price
For example assume we bought a total of 10,000 delivery assets in two transactions. If we bought 7,500 delivery assets
at a purchase price of $5.81 and 2,500 at a purchase price of $5.85 per asset, the volume-weighted-average price for
your delivery assets would be $5.82, calculated as [(7,500 x $5.81) + (2,500 x $5.85)]/10,000.
dbaccess certificates
23
If the delivery asset is a basket (for example shares
in two or more companies)
When we deliver a basket of delivery assets it will
contain equal portions of those assets by value. We’ll
calculate the portion of the maturity amount (after
expenses) available to buy each asset in the basket.
As a formula:
delivery asset portion = maturity amount – expenses
number of different assets in delivery basket
We then calculate the number of delivery assets for
each asset in the delivery basket by dividing the delivery
asset portion by the delivery asset purchase price.
We round down the number of delivery assets to the
nearest whole number.
As a formula:
number of delivery assets = delivery asset portion
purchase price
What happens to the remainder after rounding down?
There may be a remainder as we round down the
number of delivery assets. We calculate the remainder
by subtracting the delivery assets’ value from your
maturity amount (less expenses). The delivery assets’
value is their purchase price multiplied by the number of
your delivery assets. If the remainder is more than $50
or its equivalent in another currency, you’ll be paid the
difference as soon as practical. We keep any remainder
less than $50 when we transfer the delivery assets
to you.
How much would you receive if you ask us to
sell your delivery assets?
We’ll subtract expenses from the amount we received
from selling your delivery assets, and then add
the remainder.
As a formula:
sale proceeds = sale amount – expenses + remainder
In this formula:
24
„„
sale amount is the amount we receive from selling
your delivery assets for you. This might be more or
less than the amount we paid for the delivery assets.
„„
remainder is the amount remaining after
subtracting the total purchase price of your delivery
assets from your maturity amount (less expenses).
Income: Australian shares
series 8A & 8B/2011
„„
expenses are any costs and taxes that we or our
agents incur, or expect to incur, from selling your
delivery assets or paying the sale proceeds to you,
which we decide (acting reasonably) to pass on
to you.
When do the obligations end?
You have no further rights and we have no further
obligations to you in relation to each certificate when
we or Deutsche Bank has:
„„
transferred the delivery assets to you or paid you
the sale proceeds for your maturing certificates.
„„
registered your transfer (see ‘Withdrawals,
transfers and mortgages’)
„„
paid you the early termination amount or given
you a termination notice stating that the early
termination price is zero (see ‘Adjustments and
early termination’).
Adjustments and early termination
What are adjustment events?
There’ll be an adjustment event when we decide
there’s been: an event affecting our ability to settle any
transactions relating to the certificates or get values for
a reference index (or anything that makes up the index);
or a corporate action affecting the reference index. If
there’s an adjustment event we’ll consider the impact
of the event on your certificates and decide whether
we should:
„„
make an adjustment, or
„„
treat the adjustment event as an early
termination event.
What adjustments can be made during the life
of the certificates?
If there’s an adjustment event we can decide to make an
adjustment or to terminate the certificates. If we decide
to make an adjustment, we’ll act reasonably and let you
know the:
„„
nature of the event and when it happened, and
„„
general effect of our action and when it takes effect.
When we make an adjustment we intend to place you
in a similar economic position just after the adjustment
event as you would have been had it not happened.
In making this decision we’ll act in a commercially
reasonable way.
If the adjustment event relates to a reference index
that includes an index or basket of indices, we can, for
example, make an adjustment by:
Examples of adjustment events are:
„„
„„
if there’s a disruption, suspension, limitation, failure
to open or closure of trading on any financial market
„„
if there’s a change that affects how a price is
determined (such as a change in taxes) that we think
is material or a price isn’t published
„„
if the sponsor of a reference index:
„„
——
doesn’t publish it
——
permanently cancels it
——
announces a change in the method of calculating
it or any other change that modifies the index and
we consider that change material
in relation to the delivery asset or another thing that
we’ve chosen for a reference index (for example a
basket of shares), if the following happens:
——
there’s an action that we decide has a diluting or
concentrating effect on the thing’s value
——
we decide something has happened that changes
a holder of the thing’s rights or obligations
(excluding the payment or declaration of ordinary
cash distributions and dividends)
——
we decide there’s insufficient liquidity (for
example the thing’s suspended or delisted from
an exchange or market or applications and
withdrawals are suspended)
——
the thing is a managed investment of any type
and a person responsible for its operation or
management breaches any of their obligations.
„„
taking the value of any affected reference index to
be its value on the next business day, if there isn’t a
disruption that day. If there’s a disruption for more
than one consecutive business day, we’ll calculate
the index ourselves for the disruption period. We can
do this the same way it was calculated before the
disruption or a different way. We can:
——
use the traded or published price, or estimate of
the price of anything that makes up the index at the
close of the relevant stock exchange or market, on
a business day the disruption occurs, or
——
estimate index value at that time in some
other way
choosing another index issuer or sponsor and use
their calculation and announcement.
If the adjustment event relates to the delivery asset or to
something we’ve chosen for a reference index that isn’t
an index (for example, it’s a basket of shares), we can,
for example, adjust:
„„
any variable relevant to the delivery asset or the
reference index that we think is appropriate to
account for the event, including determining
the price or value of the delivery asset or
reference index, or replacing the delivery asset or
reference index
„„
the terms or the number of your certificates.
If we use a published price to calculate an amount and
it’s corrected, and the correction is published by the
exchange, issuer or index sponsor, we may determine the:
„„
amount payable to you as a result of that correction
„„
extent to which we decide to adjust any payment or
delivery to account for it.
dbaccess certificates
25
What is an early termination event?
An early termination event is an event that ends the
investment before maturity. It will happen if:
„„
we decide not to make an adjustment when an
adjustment event happens
„„
we accept a withdrawal request from you (only
the number of certificates you request to withdraw
will be terminated). The process you must follow
if you want to withdraw is set out in ‘Withdrawals,
transfers and mortgages’
„„
any of the following happens and we decide
to terminate:
——
we decide something has happened, making
it impossible or impractical for us or Deutsche
Bank to perform any of our obligations in relation
to the certificates
——
we decide we or Deutsche Bank can’t hedge
our exposure under the certificates, or we or
Deutsche Bank are likely to incur increased costs
as a result of hedging our or its exposure under,
or in connection with, the certificates
——
because of a change or prospective change
of law, including how the law is interpreted or
administered by any court or authority, one or
more of the following happen after issue:
„„
„„
26
more requirements have been imposed
on us or Deutsche Bank, which we or it
consider unreasonable
„„
a certificate or any of our or Deutsche Bank’s
obligations becomes illegal
„„
we decide there’s a more than remote risk
of an increase in our or Deutsche Bank’s
economic costs
——
we decide it’s not legal or consistent with our
internal policies, or practical or economic to
continue the certificates
——
you become the subject of liquidation,
bankruptcy, insolvency, dissolution, winding-up
or any similar proceeding
——
a representation you made in the application is
false, deceptive or misleading
——
you don’t do something you were supposed
to under the terms of the certificates on time,
including not paying an amount on time
any other event described as an early termination
event in the ‘Offer summary’ including a call event
or walk away.
Income: Australian shares
series 8A & 8B/2011
What happens after an early
termination event?
When there’s an early termination event (other than
for any specific termination event listed in the ‘Offer
summary’ that has a defined termination outcome)
we’ll decide:
„„
when the certificates terminate
„„
the certificate early termination price.
When we decide these things we’ll act in good faith and
a commercially reasonable way.
As soon as practical after deciding the early termination
date, we’ll notify you of the certificates’ early
termination price. If there’s an early termination event
you’ll receive cash without the option of receiving the
delivery assets.
Early termination price
We’ll calculate the early termination price at the close
of business on the early termination date, acting
reasonably. We’ll consider a range of factors including:
„„
the market value of any instruments we might use to
hedge our obligations under the certificates (such as
futures, options, swaps and cash deposits)
„„
break costs and taxes from unwinding those
hedges, and
„„
other costs and taxes.
Market value of hedge instruments
We might hedge our obligations. The market value of
these hedge instruments reflects the value of:
„„
the level of the reference index
„„
the level of interest rates, and
„„
options over the reference index. The option
values will be influenced by the value and expected
volatility of the reference index on the early
termination date and interest rates.
Break costs and taxes from unwinding
hedge instruments
Break costs and taxes are the costs and taxes we’d
incur if we’d decided to hedge our obligations and then
had to unwind those hedges as a result of the early
termination. Break costs will be impacted by a number
of factors including administration costs or loss of
profit for the terminated hedge positions. For example,
a widening bid/offer spread in the hedge instruments
would increase break costs which means your early
termination price would be lower.
Factor that might be considered
Likely impact on break costs
Likely impact on early termination price
widening bid/offer spread in hedge instruments
é
ê
greater liquidity in hedge instruments
ê
é
higher brokerage, taxes and related imposts
é
ê
Other costs and taxes
We may incur other costs and taxes as a result of the early termination including administration costs for processing
the early termination or loss of profit (which will be impacted by payments made by us or Deutsche Bank that can’t
be recovered, such as commission paid).
Early termination amount
The early termination amount we pay will be equal to the number of certificates terminated early, multiplied by the
early termination price. We’ll pay you the early termination amount within seven days of the certificates terminating.
You won’t receive any delivery assets.
dbaccess certificates
27
Withdrawals, transfers and mortgages
Can you withdraw?
Can you transfer your certificates?
If you’d like to withdraw please call 1800 634 850 for
a withdrawal form. We can accept (or refuse) your
withdrawal request. For example we may refuse your
withdrawal if your withdrawal form isn’t correctly
completed, if we have issued a maturity notice, or if
we’re experiencing an adjustment event.
If you’d like to transfer your certificates please call
1800 634 850 for a transfer form. You’ll need to properly
complete the form in the way it describes and be sure
it’s signed by you and the transferee. At the date of this
PDS, Australian taxes aren’t payable before the transfer
can take effect (such as stamp duty). If this changes
you’ll also need to show us you’ve paid all taxes
required for the transfer to take effect.
We’ll need to receive your properly completed form
by the withdrawal request date listed in the ‘Offer
summary’. The withdrawal must be for at least the
minimum number of certificates listed in the ‘Offer
summary’. When we have received your form, you
can’t change your mind.
If we accept your withdrawal request it will be an early
termination event for the number of certificates you’ve
withdrawn. We’ll calculate the early termination price
and pay you any early termination amount in the way it
is described in ‘Adjustments and early termination’.
If you’re thinking about withdrawing, you should speak
with your tax adviser as this may impact how your
investment is taxed.
You can’t apply for a transfer after we’ve sent you a
maturity notice. If you apply for a transfer less than 10
business days before a distribution date, we’ll process
your transfer after we’ve paid any distributions. If you
apply for a transfer less than 10 business days before
an instalment of the issue price is due, we’ll process
your transfer after you’ve paid it. When we’ve received
your transfer form, you and the transferee can’t change
your mind.
The transfer takes effect when we register it. By
completing a transfer form, the transferee agrees to be
bound by the certificate terms (including paying future
instalments) when the transfer is registered.
If you’re thinking about transferring your certificates,
you should speak with your tax adviser as this may
impact how your investment is taxed.
What if you’ve mortgaged your certificates
or hold them in trust?
We can record that your certificates have been
mortgaged or held in trust. If we don’t, we have no
obligation to the mortgagee or beneficiaries. If we
do, your ability to transact will be limited unless we
have the consent of the mortgagee or beneficiaries.
Payments or settlement can also be made to the
mortgagee instead of you. We won’t make payments
or settle with the beneficiaries.
28
Income: Australian shares
series 8A & 8B/2011
Communication
Contacting you
You’re taken to have received our communications:
How can you get valuations?
„„
when we receive a report confirming successful
transmission to your last notified fax number or
email address
„„
on hand delivery to your last notified address
The certificate values will be published monthly at
www.dbaccess.db.com. They’re our estimate of what
the certificates are worth at a particular time. They
aren’t an indication of the early termination price you’d
receive after an early termination event.
„„
three days after posting to your last notified address,
or seven days after if sent internationally.
What if you have a question?
If we don’t give you a notice when we were supposed
to, the act to which the notice applies is still valid.
Contacting us
Any communication to us about your certificates
will need to be in writing and signed by you or your
authorised representative unless we agree otherwise.
If you hold your certificates jointly, one of you can
sign unless you’ve advised us that joint signatures
are required.
We’re taken to have received your communications when
they’re received at the last notified address of the registry
(or fax number), unless we let you know differently. If
that’s after business hours then we’re taken to have
received them on the next business day.
Faxed communications must be legible or they’re deemed
ineffective. You should keep a copy of the fax confirmation
in case you need to verify successful transmission.
Paying you
We or Deutsche Bank will pay you by direct credit
to the bank account we have on record unless we
decide differently. The payment date is when we or
Deutsche Bank give instructions to the bank that
makes the transfer to you.
Paying us
You’ll need to pay us any amounts by the due date in
the ‘Offer summary’. You can pay us by:
„„
cheque drawn from your account (we don’t accept
payment from third parties), or
„„
authorising us to direct debit your account
by completing the direct debit section of the
application form.
For any questions about the applications,
transfers, withdrawals and distributions,
contact the registry on 1800 634 850 in Australia
or email deutsche@boardroomlimited.com.au.
For other questions about dbaccess certificates,
please contact your financial adviser.
What if you have a complaint?
We’re committed to handling all complaints
fairly. If you have a complaint, please
write to us c/- Boardroom Pty Limited,
GPO Box 3993, Sydney NSW 2001, or
email deutsche@boardroomlimited.com.au.
We handle complaints by:
„„
trying to resolve them as quickly as possible
„„
staying in touch — if we can’t resolve it within five
business days, we’ll write to you so you know we’ve
received your complaint
„„
writing to you advising the outcome of your
complaint — if we don’t hear from you within a
month, we’ll consider your complaint resolved.
Generally, if we haven’t resolved your complaint within
45 days we'll write to you advising you have a right to
complain to the Financial Ombudsman Service (FOS) —
an independent dispute resolution service, of
which we are a member. FOS only considers
claims under $150,000 unless we agree in writing.
Call 1300 780 808 in Australia, fax + 61 3 9613 6399,
email info@fos.org.au, or write to Financial Ombudsman
Service, GPO Box 3, Melbourne VIC 3001.
If you want to change your payment method or
nominate a different bank account (which needs to
be in your name and not in the name of a third party),
please advise us at least five business days before any
payment is due.
dbaccess certificates
29
Other things
Our agreement with Deutsche Bank
We’ve agreed with Deutsche Bank that:
„„
we’ll give it your total investment amount after we receive it
„„
in return, it will:
——
pay us any distributions as soon as practical after each
distribution date
——
transfer the delivery assets to us after maturity and if you ask,
we’ll sell them for you and pay the proceeds to you, and
——
if applicable, pay us the early termination amount
„„
while we’re responsible for paying you and settling your certificates,
we’ve directed Deutsche Bank (or its agent) to pay you directly or
transfer the delivery assets to you, instead of us (as applicable)
„„
if it (or its agent) doesn’t do this, we’re still obliged to pay you or
to settle your certificates
„„
you can only demand payment or delivery of assets from us,
not Deutsche Bank.
Set-off
We may set-off any amount we owe you against any amount you owe us,
without notice. We or Deutsche Bank will only transfer the delivery assets to
you or pay you a cash amount, when we’re satisfied:
„„
we’ve received all money you owe us or may owe us at any time
„„
we won’t be asked to refund any money you’ve paid us to anyone,
such as a trustee in bankruptcy or a liquidator.
Taxes
You’ll need to pay us all taxes we incur with your certificates (other than our
income tax). You indemnify us for any costs we incur because you didn’t
pay us these taxes. You need to pay us when we ask.
The law may require us to make deductions from amounts we’d otherwise
pay you. We may need to pay the amount deducted to a third party. For
example, this might include various types of withholding taxes.
If we have to make a deduction or pay a third party:
„„
we may deduct the amount from any distribution amount payable during
the term
„„
if we haven’t already reduced the distribution amount by the deduction
amount or third party payment, and if:
——
the delivery assets haven’t been transferred to you or sold on your
behalf, we may reduce your maturity amount by the deduction
amount or third party payment
——
settlement has already happened, you’ll need to pay us the deduction
amount or third party payment when we ask.
You’ll continue to have this obligation after transfer, maturity or
early termination.
30
Income: Australian shares
series 8A & 8B/2011
Law
The law that applies in New South Wales governs these
terms. You submit to the non-exclusive jurisdiction of
the New South Wales courts and the courts of appeal
from them. To the extent the law allows:
„„
lawful terms aren’t affected by terms that are void,
illegal or unenforceable. Only those affected terms
are ineffective
„„
any present or future law that varies your obligations
or rights and adversely affects us are excluded
„„
these terms prevail if they’re inconsistent with
any law
„„
any document we give you about an amount payable
or other matter relating to your certificates is binding
except in the case of an obvious error.
trust means your certificates are regulated as securities
under chapter 7 of the Corporations Act. You stop being
a beneficiary under the nominee arrangements if you’re
no longer registered as a certificate holder.
We explain the key terms of the trust over the
nominee assets below. Please ask us if you’d like a copy
of the deed.
We:
„„
are the nominee and trustee
„„
can, but don’t have to, cast any votes or participate
in plans by the issuer of the nominee assets to
reinvest income distributions
„„
will act as nominee only when our liability is limited
to an amount equal to the total amount we receive
from the trust, except in certain circumstances eg.
where we’ve acted fraudulently or negligently
„„
have a right to be compensated from the trust assets
for any costs properly incurred
„„
must retire in certain circumstances or we can
resign as nominee and appoint a replacement.
Issuer discretion
This PDS allows us to make decisions affecting your
investment without consulting you. When we make
those decisions we’ll try to act in good faith and in a
commercially reasonable way. We’ll notify you of any
decisions we make.
Changing the terms
We’ll notify you if we change these terms:
„„
to comply with any law
„„
because of an adjustment event
„„
to clarify an ambiguity or correct an obvious error
„„
to make a formal, minor or technical change that
doesn’t materially prejudice your interests.
We will also notify you from when the change applies.
Ethical issues
You can’t:
„„
have nominee assets delivered to you and won’t
receive any capital distributions
„„
receive notices of meetings of shareholders of
the nominee asset company, or attend or vote at
their meetings
„„
ask us to do any of these things.
An event may cause us to choose to sell or substitute
the nominee assets. If we sell the nominee assets,
we’ll use the sale proceeds to buy other assets that will
form part of the nominee assets. You can’t challenge
the sale’s validity.
We don’t consider labour standards, environmental,
social or ethical considerations when we choose, retain
or realise investments.
Nominee arrangements
You are the beneficiary of the nominee arrangements
created under a trust deed dated 6 August 2009. The
other beneficiaries are Deutsche Bank and the other
holders of certificates we issue from time to time. All
investors share the beneficial interest in nominee assets
($10 plus a small number of shares in one or more
companies listed on the ASX). This doesn’t include the
beneficial interest in distributions from the nominee
assets Deutsche Bank holds in its personal capacity. The
interest you’re given in the nominee assets through this
dbaccess certificates
31
22 October 2010
The Directors
Deutsche Managed Investments Limited
Corner Hunter & Phillip streets
Sydney NSW 2000
Tax opinion
This is our opinion on the Australian tax treatment of deferred purchase agreements (referred to in this opinion
as ‘certificates’) of the kind described in parts 1 and 2 of this product disclosure statement (PDS).
It provides general information for a range of certificates that Deutsche Managed Investments Limited (issuer)
may issue from time to time. As our opinion does not take an investor’s individual circumstances into account,
an investor should not rely on this opinion but should seek professional tax advice before investing.
Investors should read both parts of the PDS, as the terms of a specific certificate may affect the application of
the general comments.
When is this opinion relevant to an investor?
This opinion outlines the expected taxation treatment of the certificates for an investor who:
• is an Australian resident for Australian income tax purposes; and
• holds the certificates and the delivery assets on capital account. This is generally the case if they invested in
the certificates intending to hold the delivery assets and receive dividend income or trust distributions on a
long-term basis, or if they are a special class of investor, such as a complying superannuation fund.
For completeness, we have included comments on the likely tax position of Australian resident investors who hold
their certificates on revenue account. The opinion is not relevant if the investor is a non-resident for Australian
income tax purposes or holds their certificates through a permanent establishment located outside Australia.
Summary of potential tax implications
The main tax implications for an Australian resident investor who holds their certificates on capital account
should be as follows:
1. The physical settlement of the certificate on maturity should be treated as a disposal of a capital gains tax
(CGT) asset, being the contractual rights under the certificate. The resulting capital gain or loss will arise on
delivery of the delivery assets. The capital gain or loss should equal the then market value of the delivery
assets (plus any cash amount received by the investor on settlement, for example, from rounding down
the number of delivery assets), less the issue price paid for the certificate (which includes the application
amount and any instalments paid by the investor) and incidental costs paid (such as adviser service fees) by
the investor to acquire the certificate.
2. At early termination or transfer of a certificate, a CGT event will also happen. A capital gain or loss should
therefore arise when the certificate is no longer held by the investor. That capital gain or loss should equal
the early termination payment received by the investor, less the issue price paid for the certificate (which
includes the application amount and any instalments paid by the investor) and incidental costs (such as
adviser service fees) paid by the investor to acquire the certificate.
3. A further capital gain or loss may arise when the investor eventually sells the delivery assets, which are
treated as a different CGT asset from the certificate. That capital gain or loss should equal the sale proceeds,
less the market value of the delivery assets on settlement of the certificate and any costs incurred by the
investor associated with that delivery.
32
4. The capital gains discount concession may apply to any capital gains arising from the CGT events mentioned
in points 1 to 3 above, when an eligible investor has held the relevant CGT asset for at least 12 months.
5. Accruals tax should not apply to any unrealised gains and losses on a certificate.
6. Any distributions paid over the life of the certificate should be included in an investor’s assessable income
when received (or credited).
7. The general anti-avoidance rule in Part IVA of the 1936 Tax Act should not apply.
8. Investing in a certificate should not result in Australian stamp duty or goods and services tax (GST) being
imposed on an investor.
What are the certificates for tax purposes?
Certificates should be CGT assets
Each certificate constitutes a deferred purchase agreement. It is a contract for the purchase of delivery assets,
with delivery deferred until maturity. The number of delivery assets delivered depends on the certificate
maturity price, which is calculated with reference to a hypothetical reference index (for example a share market
index). The maturity price is not generally known until the maturity date.
The collection of legally enforceable contractual rights under the certificate is considered to be a CGT asset
acquired on issue. That CGT asset is considered to be a separate CGT asset from the delivery assets received on
settlement of the certificate. The delivery assets are considered to be a CGT asset acquired on the settlement
date, for a cost base (or reduced cost base) equal to their market value on the settlement date plus any other
costs incurred by the investor associated with that delivery.
Certificates should not be traditional securitiesi
Gains on the disposal (or redemption) of a traditional security (which typically includes debt securities) are
included in ordinary assessable income, and any losses are normally considered to be an allowable deduction.
When the traditional securities rules apply, they override the CGT provisions.
A certificate should not be regarded as a ‘traditional security’ because it is not a ‘security’ for taxation
purposes. This is because a certificate is primarily a contract for the delivery of property. It is not a contract
under which money is payable, and it does not have other sufficient debt-like characteristics for it to meet the
definition of a ‘security’.ii
When does a taxing event occur?
First normal taxing event: maturity
At maturity, each certificate will be settled by delivery of the delivery assets to the investor, who then ceases
to have any further rights under the certificate. Settlement of the certificate should therefore be treated as
the ending of a CGT asset (being the rights under the certificate), even though the investor simply receives the
delivery assets and may not realise any cash profit or gain at that time.iii
Second normal taxing event: sale of delivery assets
The investor is delivered the delivery assets on the settlement date. Selling the delivery assets, including where
the investor asks the issuer to sell the delivery assets for them (agency sale arrangements), will constitute the
disposal of another CGT asset that occurs on the date of the sale contract or, if there is no contract, on the date
of the change of ownership.iv
Other possible taxing events
A CGT event will also happen when the investor transfers a certificate or when the certificates terminate before
maturity due to an early termination event. Early termination events can include call events, withdrawals, an
investor choosing to walk away from their investment, adjustment events where the issuer decides not to make
an adjustment, and other events listed in this PDS.
33
Transfers
An investor can transfer a certificate before maturity. Any transfer will constitute the disposal of a CGT asset
(the rights under the certificate) on the date of the sale contract or, if there is no contract, on the transfer date.v
As the tax consequences of a transfer will depend on each investor’s own circumstances, an investor should
obtain their own specific tax advice before deciding to transfer any of their certificates. For example, there is a
risk that an investor who transfers a certificate may be regarded as not having the requisite original intention to
hold the delivery assets for long-term investment purposes, and treated as holding the certificate on revenue
account. That would, among other things, result in the investor not being entitled to claim the CGT discount for
any capital gain that arises on transfer of the certificate (refer to the discussion below).
Call events
The ‘Offer summary’ will specify whether a series of certificates has a call event feature. If a call event occurs for
those certificates in the manner described in the ‘Offer summary’ , the investor’s certificates will terminate on
that day and the issuer will pay the investor a predetermined amount. The cancellation of a certificate following
a call event will be treated as a disposal of a CGT asset (being the rights under the certificate)vi. A call event
should not impact whether an investor holds their certificates on revenue account or capital account.
Walk away
The ‘Offer summary’ will specify whether a series of certificates has a walk away feature. For those certificates,
the investor can choose to walk away by not paying an instalment by the instalment date. If the investor
chooses to walk away, the investor’s certificates will terminate on the date that is listed in the ‘Offer summary’.
A walk away should therefore be treated as a disposal of a CGT asset (being the rights under the certificate) on
the date the certificates are terminatedvii.
If the investor chooses to walk away to minimise a possible future loss, the choice to walk away should not
generally impact whether an investor holds their certificates on revenue account or capital account. However
as the tax consequences of a walk away may depend on each investor’s own circumstances, an investor should
obtain their own specific tax advice before choosing to walk away.
Withdrawals
An investor can request (but does not have a right to) a withdrawal. If accepted by the issuer, the withdrawal
should be considered to be a termination of the rights under the certificate on the settlement date. Withdrawal
should therefore be treated as a disposal of a CGT asset, being the rights under the certificate.viii
As the tax consequences of a withdrawal will depend on each investor’s own circumstances, an investor should
obtain their own specific tax advice before deciding to request a withdrawal. For example, there is a risk a
withdrawing investor may be regarded as not having the requisite original intention to hold the delivery assets
for long-term investment purposes, and treated as holding the certificate on revenue account. That would,
among other things, result in the investor not being entitled to claim the CGT discount for any capital gain that
arises on cancellation of the certificate (refer to the discussion below).
Other early termination events decided by the issuer
In certain other limited circumstances described in the PDS (such as when adjustment events occur and the
issuer decides not to make an adjustment, changes in law, or in circumstances where the issuer decides it can’t
hedge its exposure or perform its obligations) the issuer may elect to terminate the certificates before maturity.
If any of these other early termination events take place, the cancellation of a certificate will be treated as a
disposal of a CGT asset (being the rights under the certificate).ix An early termination due to these other early
termination events should not generally impact whether an investor holds their certificates on revenue account
or capital account.
34
How are capital gains and losses calculated?
Each taxing event described above would be a ‘CGT event’, which could result in a capital gain or capital loss for
an investor.
If the capital proceeds from the CGT event are:
• greater than the asset’s cost base, then a capital gain will arise, or
• less than the asset’s reduced cost base, then a capital loss will arise.
The capital proceeds would be as follows.
• On delivery of the delivery assets, the capital proceeds equal the market value of those delivery assets at
the time of delivery, plus any cash amount received because it is not possible to deliver part of a delivery
asset. Settlement by physical delivery will usually happen as soon as practical after maturity.
• Where a sale of the delivery assets takes place under the agency sale arrangements, the capital proceeds
equal the sale proceeds received by the investor as soon as practical after maturity.
• On early termination or transfer of the certificates, the capital proceeds should equal the amount of any
payment received (and should not include any unpaid instalments).
The cost base and reduced cost base of a certificate should equal the issue price paid for the certificates (which
includes the application amount and any instalments that the investor has paid before the date of the CGT
event) plus any incidental costs paid by the investor to acquire the certificates.x
In each of the above cases, where the capital proceeds (if any) are less than the issue price paid for the
certificates plus the investors’ incidental costs, the investor will make a capital loss equal to that shortfall.
The subsequent sale of the delivery assets on market will give rise to a capital gain (or loss). The capital gain
(or loss) should be calculated as the proceeds of sale, less the cost base (or reduced cost base) of the delivery
assets. The cost base and reduced cost base of the delivery assets will be the sum of their market value at the
time of delivery and any costs incurred by the investor associated with taking delivery of the delivery assets on
settlement of the certificate.
A capital loss cannot be used to reduce tax payable on ordinary income, but it can generally be offset against
any capital gains arising in the current or future income years.
When does the CGT discount apply?
Individual investors, trusts and complying superannuation funds may be eligible for a capital gains concession.
Companies are not entitled to the concession.xi
Generally, an investor should be eligible if they held the CGT asset for at least 12 months before the disposal
(excluding the acquisition and disposal dates).xii There are some exceptions.
To calculate the concessional capital gain amount (when applicable), the investor first subtracts all available
capital losses from their capital gains, and then multiplies each eligible gain by the discount percentage. The
discount percentage is 50% for individuals and trusts, and 33 1/3% for complying superannuation funds.
What happens if the investor does not pay any instalments of the issue price?
If specified in the ‘Offer summary’, the issue price of a certificate may be payable by instalments. The investor is
not required to pay any further instalments in respect of their certificates if an early termination occurs or if the
investor transfers their certificates before maturity.
The debt forgiveness rules in Division 245xiii should not apply to the investor in respect of any unpaid
instalments. Furthermore, no ordinary income should arise for an investor who holds the certificates
on revenue account.
35
Is there accruals tax?
Income tax legislation contains regimes to tax certain financial instruments on an accruals basis. When
they apply, unrealised gains and losses on the financial investments may become subject to accruals tax,
regardless of whether the investor has received any cash payments through either distributions or the
realisation of their investment.
The following accruals tax regimes should not apply to the certificates.
No Division 16E Accrual
Division 16Exiv applies if an investment is a ‘qualifying security’. Broadly, this covers any ‘security’ that has a term
of more than 12 months and provides returns in a form other than periodic interest. In line with the preceding
comments, given that a certificate would not ordinarily meet the definition of a ‘security’, Division 16E should
not apply.
No foreign investment fund and controlled foreign company accrual
Broadly, the provisions relating to the attribution of income in foreign entities (that is, the former foreign
investment fundxv rules and controlled foreign company provisionsxvi) apply if an investor holds an interest in a
foreign company or foreign trust, or is entitled to acquire such an interest, at the end of a tax year.
These provisions should not apply to investors when they acquire the certificates or when the delivery assets
are delivered to the investor, as the delivery assets will be interests in Australian resident entities.
No Division 230 accrual
Division 230xvii taxes some gains and losses from financial arrangements on revenue account and applies new
timing rules for when these gains and losses are recognised.
Division 230 should not apply (unless investors choose to apply it) to:
• individual investors, or
• certain other investors (such as complying superannuation funds and managed investment schemes) that do
not exceed various turnover or assets thresholds.
The rules in Division 230 are complex and investors that may be subject to Division 230 should seek their own
specific tax advice regarding the possible effect of the new rules on their investment.
What is the tax treatment of distributions?
Any distributions payable under a certificate should be considered ordinary income and included as “other
income” in an investor’s assessable income at the time they are received or credited. They will not constitute
interest, a franked dividend or a trust distribution.
As the certificate is not considered an investment subject to the tax file number (TFN) quotation rules, investors need
not quote their TFN in order to prevent the TFN withholding tax from being withheld by the issuer.
ATO announcements
This opinion is consistent with the views expressed by the Australian Taxation Office (ATO) in two Taxation
Determinations (TDs) and related ATO supporting documentation:
• TD 2008/21 concludes that a deferred purchase agreement (being the legal form of a certificate) is not a
traditional security, and a gain or loss under the agreement is generally on capital account. The ATO notes
that particular terms of the agreement and/or circumstances of the investor could mean that the gain or
loss is on revenue account.
• TD 2008/22 concludes that an investor’s rights under a deferred purchase agreement are a CGT asset. The
satisfaction of those rights through the delivery of the delivery assets results in a CGT event happening at
the time of delivery.
36
The tax treatment prescribed by the ATO applies to deferred purchase agreements having the features set
out in the TDs. The example on which the TDs are based is a deferred purchase agreement which has ‘a share
market index or basket of indices’ as its reference index and a typical term of between three and five years.
When the certificates bought by an investor are the same as those described in the TDs, the investor should be
able to rely on the TDs for protection from paying any income tax, penalty or interest that results from a later
change in the way the ATO interprets the law. For certificates that differ from the example given in the TDs, the
ATO is not prevented from imposing income tax, penalties and interest where it later determines that a different
taxation treatment should apply.
In some cases, the certificates to be issued will be similar to, though not exactly the same as, the example
described in the TDs. To illustrate, the certificate may be linked to a reference index that is not a share market
index. In this case, we expect the ATO will apply the tax treatment described in this opinion. The ATO confirmed,
in a non-binding compendium, that the principles in the TDs should generally extend to deferred purchase
agreements with reference assets other than share market indices.
Will your investment be on revenue account?
TD 2008/21 states that, while a gain or loss on a deferred purchase agreement would generally be on capital
account, in some cases the terms of the deferred purchase agreement and/or the circumstances of the investor
may result in the gain or loss being on revenue account. Where a gain is on revenue account, then normally the
CGT rules do not apply, so no CGT discount will be available. However, where a loss is on revenue account, it can
generally be applied against ordinary income (in addition to capital gains).
An investor who is an individual will generally be regarded as holding a certificate on revenue account when:
• at the time of entering into the transaction, the investor intends to make a profit by selling the certificates
or the delivery assets, or requesting a withdrawal, or electing to walk away (if applicable) rather than to hold
the delivery assets indefinitely to produce income, or
• the transaction was entered into, and a profit (or loss) was made, in the course of carrying on a business
of trading in shares, or other marketable securities or in carrying out a business operation or commercial
transaction.
These matters are determined by the ATO objectively looking at a number of factors, such as the original
intention of the investor, the nature, scale and complexity of the transaction, the extent that the certificate
departs from the deferred purchase agreement described in the TDs and the nature, scale and complexity
of other activities carried on by the investor. The ATO’s assessment will vary, depending on the individual
circumstances of each case.
Investors should therefore seek their own tax advice in order to determine whether their circumstances will
result in their investment in a certificate being taxed on revenue account.
What about selling to raise money to pay tax?
The intended or contemplated sale by an investor of certificates or delivery assets to realise cash to pay any tax
payable because of the taxing event that occurs on settlement should not, of itself, result in any certificates or
delivery assets being treated as held on revenue account.
What about borrowing to invest?
The issuer does not offer loans to fund an investor’s investment in certificates. The tax implications of
borrowing to acquire certificates are complex, and will depend on the particular facts. To date, the ATO has
refrained from publicly stating its view (but see Private Ruling Authorisation Number 93427). Investors should
seek their own tax advice if they are considering gearing their investment.
37
What is the tax treatment of adviser service fees?
If specified in the ‘Offer summary’, an investor may pay adviser service fees to their financial adviser or other
approved people in respect of their certificates. As the arrangements regarding adviser service fees will depend
on an investor’s individual circumstances, an investor should obtain their own advice on the tax treatment of
adviser service fees.
However, where:
• an investor is holding their certificates on capital account, and
• the fees are paid for one-off advice as to whether to invest in the certificates,
such fees (whether paid upfront or over time) are unlikely to be deductible and should be included in the
investor’s cost base for certificates as an incidental cost. However, the adviser service fees may be deductible
for an investor who holds the certificates on revenue account.
What is the risk of the general anti-avoidance provision in Part IVAxviii applying?
When an investor enters into a scheme that produces a tax benefit for the investor, the Commissioner of
Taxation can use Part IVA to cancel the benefit if it could be concluded from the facts that the dominant
purpose of the investor (or any other party to the scheme) was to secure the tax benefit.
The ATO has not indicated, either in the TDs noted above or in any other publicly available information, that
the Commissioner may apply Part IVA to an investment in a deferred purchase agreement. A deferred purchase
agreement is a generally accepted retail investment product.
Our view is that it is reasonable to expect that the ATO would not apply Part IVA to an investor who invests
in a certificate to acquire and hold the delivery assets as part of their normal investment portfolio strategy.
However, given that the application of Part IVA depends on an investor’s particular circumstances, investors
should seek their own tax advice.
Is there any liability to Australian stamp duty?
On the basis that delivery assets comprise quoted securities issued by listed entities, Australian stamp duty
should not be payable on the investment in, or the disposal of, the certificate or on the delivery of, or sale by an
investor of, the delivery assets. However, the issuer can claim an additional amount from investors if stamp duty
becomes payable.
Is there any liability to Australian GST?
Australian GST applies at the rate of 10% to the consideration payable on taxable supplies. On the basis that
delivery assets comprise quoted securities issued by listed entities, GST should not apply to the issue of the
certificate or the delivery of the delivery assets, as these should be considered financial supplies and therefore
are not taxable.xix However, the issuer can claim an additional amount from investors if GST does become
payable. Also, investors should not be liable for GST when: they transfer a certificate; a certificate is subject to
early termination; or they sell the delivery assets.
If an investor is registered for GST, they may not be able to claim input tax credits for GST they paid for goods
and services (such as financial advice) relating to the acquisition of certificates or delivery assets. This depends
on an investor’s individual circumstances. Investors should therefore seek their own tax advice.
If specified in the ‘Offer summary’, an investor may pay fees to their financial adviser or other approved people
(the adviser) in respect of their certificates. The fee will be paid to the issuer who collects it on behalf of the
investor's adviser and forwards it to that adviser. In the event that a fee is payable by an investor, that fee may
be consideration for a taxable supply made by an adviser to the investor. The fee is GST inclusive which means,
if the fee is consideration for a taxable supply, the fee includes Australian GST in an amount equal to 1/11th of
the total fee paid. If an investor is registered for GST, they may be able to claim input tax credits for GST paid in
respect of a taxable supply. This depends on an investor's individual circumstances. Investors should therefore
seek their own tax advice.
38
Changes to the law
Our opinion reflects Australian law and administrative practice at the date of this letter. The tax treatment of
certificates may change if there is a change or prospective change of law, including a change in legislation or
how it is interpreted or administered by a court or authority.
Yours faithfully
i. See sections 26BB and 70B of the Income Tax Assessment Act 1936 (1936 Tax Act).
ii. See the definition of “security” in subsection 159GP(1) of the 1936 Tax Act.
iii. The CGT event is CGT event C2 referred to in section 104-5 of the Income Tax Assessment Act 1997 (1997 Tax Act). See also Taxation Determination TD
2008/22.
iv. The CGT event is CGT event A1 referred to in section 104-5 of the 1997 Tax Act. See also Taxation Determination TD 2008/22.
v. The CGT event is CGT event A1 referred to in section 104-5 of the 1997 Tax Act.
vi. The CGT event is CGT event C2.
vii. The CGT event is CGT event C2.
viii. The CGT event is CGT event C2.
ix. The CGT event is CGT event C2.
x. If your adviser waives their commission and you receive additional certificates, you should spread your cost base and reduced cost base over the number
of certificates that are issued to you. Costs incurred by the issuer or its agents in buying and selling delivery assets which are passed on to an investor will
be reflected in the reduced sale proceeds or delivery assets received by an investor.
xi. Refer Division 115 of the 1997 Tax Act.
xii. This assumes that, in the case of the Delivery Assets, the entity in which the relevant Delivery Assets are then held will have at least 300 members, and
that there will not be any concentration of ownership, at the relevant time. (Refer sections 115-45 and 115-50 of the 1997 Tax Act.) This assumption is
reasonable in the present case.
xiii. Refer Division 245 of the 1997 Act.
xiv. Refer Division 16E of Part III of the 1936 Tax Act.
xv. Contained in former Part XI of the 1936 Tax Act. These rules have been repealed (from 1 July 2010). Legislation containing details of the new rules (which
are to apply from 1 July 2010) has not yet been introduced into Parliament.
xvi. Contained in Part X of the 1936 Tax Act. (In the 2009 Federal Budget, the Federal Government announced a proposal to modify or replace these rules. No
amending legislation has been introduced to date.)
xvii. Refer Division 230 of the 1997 Tax Act.
xviii.Part IVA of the 1936 Tax Act.
xix. Item 11 of the table in GST Regulation 40-5.09.
39
Consent
Mallesons Stephen Jaques has given its written consent to the inclusion of
the ‘Tax Opinion’ in this PDS in the form and context in which it is included
and has not withdrawn that consent before the date of this PDS. It has
not caused the issue of this PDS or made any statement that is included
in this PDS or any statement on which a statement in this PDS is based,
except as stated above. Other than where it is specifically referred to, it
expressly disclaims and takes no responsibility for any statements in, or
omissions from, this PDS. This applies to the maximum extent permitted by
law and does not apply to any matter and to the extent to which consent is
given above.
40
Income: Australian shares
series 8A & 8B/2011
About us
Deutsche Bank Group
Deutsche Bank Group is a leading global investment bank in Europe, with
a strong presence in North America, Asia and key emerging markets. It has
a strong and profitable franchise in Australia and New Zealand. Deutsche
Bank Group’s Global Markets division in Australia is a full-scale, integrated
business that originates, structures, trades and sells debt, equity, foreign
exchange, commodity, derivative and money market products. It develops
innovative solutions to meet the financing, investing and hedging needs of
its clients including leading private banks and advisory groups, companies,
governments and institutional investors. Deutsche Bank publishes quarterly
financial updates at www.db.com.
Deutsche Managed Investments Limited
Deutsche Managed Investments Limited (DMIL) is a wholly owned
member of the Deutsche Bank Group. DMIL issues structured products
and investments. It offered its first financial product (dbaccess certificates)
on 12 August 2009. DMIL was registered on 14 February 2006 and
has share capital of $5,500,001 and net assets of $5,735,330 (as
at 31 December 2010). DMIL prepares annual financial statements
and lodges them with the Australian Securities and Investments
Commission as required. See DMIL’s most recent financial statements
at www.dbaccess.db.com.
Deutsche Bank doesn’t guarantee the obligations of DMIL in respect of the
certificates. However, it has agreed to make payments or deliver assets to
DMIL (or at DMIL’s direction), equivalent to DMIL’s obligations to you under
the certificates. DMIL has directed Deutsche Bank to make payments and
deliver assets to you, and it has agreed. DMIL can’t cancel that direction.
Only DMIL is obliged to make all payments and deliveries under the
certificates. This means you can only demand payment or delivery of assets
from DMIL, not Deutsche Bank.
dbaccess certificates
41
Financial services guide
Deutsche Managed Investments Limited ABN 55 118 336 584, AFSL 330531
23 September 2011
In this FSG when we refer to we, us or our, we mean
Deutsche Managed Investments Limited.
This FSG is designed to help you decide whether to use
our financial services. It contains information about our
remuneration and about how we deal with complaints.
Our contact details are on the back cover of the
combined PDS and FSG.
What services do we provide?
What if you have a complaint?
We’re committed to handling all complaints
fairly. If you have a complaint, please
write to us c/- Boardroom Pty Limited,
GPO Box 3993, Sydney NSW 2001, or
email deutsche@boardroomlimited.com.au.
We handle complaints by:
„„
trying to resolve them as quickly as possible
„„
staying in touch — if we can’t resolve it within five
business days, we’ll write to you so you know we’ve
received your complaint
„„
writing to you advising the outcome of your
complaint — if we don’t hear from you within a
month, we’ll consider your complaint resolved.
We provide financial services with the certificates. We:
„„
hold the nominee asset and any substitute nominee
assets in trust for investors
„„
issue the certificates
„„
deal in the certificates or the delivery assets.
When we provide these financial services to you we act
on our own behalf.
Under our AFSL 330531, we can deal and advise on:
„„
securities
„„
deposit products
„„
derivatives
„„
foreign exchange contracts
„„
government debentures, stocks and bonds
„„
our own managed investment schemes.
We can also operate certain types of registered
managed investment schemes and provide custodial
or depository services (other than investor-directed
portfolio services).
The scope of our AFSL is broader than this. To view the
entire scope of our licence, refer to the AFS Licensees
Register at www.asic.gov.au.
Other than payment of the issue price for certificates,
we don't receive any commission or fees from issuing
the certificates or holding the nominee assets. Deutsche
Bank Group may earn income from holding the
nominee assets; managing our risk position; buying
and selling of the certificates through any secondary
market; brokerage from buying and selling the delivery
assets; and any advice provided by our Private Wealth
Management Group on the certificates. See ‘About us’
in the PDS for more information.
42
Generally, if we haven’t resolved your complaint within
45 days we'll write to you advising you have a right
to complain to the Financial Ombudsman Service
(FOS) — an independent dispute resolution service,
of which we are a member. FOS only considers
claims under $150,000 unless we agree in writing.
Call 1300 780 808 in Australia, fax + 61 3 9613 6399,
email info@fos.org.au, or write to Financial Ombudsman
Service, GPO Box 3, Melbourne VIC 3001.
Compensation
We hold professional indemnity insurance. The insurance
also covers claims for conduct of employees and
representatives who no longer work for us, but did at
the time of the relevant conduct, subject to the terms
of the policy. This insurance satisfies the mandatory
requirements for compensation arrangements applying to
financial services licensees under the Corporations Act.
How to apply
You can apply by:
1. completing the application form with an approved adviser. Call 1800 634 850 if you have any questions.
2. giving us the relevant supporting documents
3. sending the application form, supporting documents and cheque payable to Deutsche Managed Investments
Limited (unless you’ve chosen to direct debit) to:
Deutsche Managed Investments Limited
c/- Boardroom Pty Limited
GPO Box 3993 Sydney NSW 2001
If you send your application to a different address we might not receive it before the offer closes, which means we
could reject your application, or might not receive it at all.
Supporting documents
You’ll need to provide different documents depending on the kind of investor you are. Incomplete forms or insufficient
supporting documents can delay or stop your application.
The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF) and associated rules
and regulations require us to conduct customer due diligence. This means we’ll need to collect information and
documents from you before we can give you a financial service or product covered by AML/CTF legislation. As
part of the application process, we may ask you for more information or documents including information about a
certificate holder, any beneficial interest in the certificates and the source of funds used to invest. We may also obtain
information about you or any beneficial owner of a certificate from third parties if we think it’s necessary to comply
with AML/CTF legislation. From time to time, we may need to update our client information and documentation. We
also need you to tell us if any of the information you provide on the application changes (for example your address or
company ownership details). The legislation also requires that we monitor client transactions, so we may contact you
to understand details relating to your certificates.
If the documents you provide aren’t in English, please provide a translation by an accredited translator. Documents
can be certified by a: legal practitioner, notary public, police officer, solicitor, justice of the peace, chartered
accountant, an Australia Post employee (must be an employee for two years or more) or your financial adviser.
The table below lists the supporting documents you’ll need to provide, depending on the kind of investor you are.
Investor
Description
Supporting documents
Individual(s)
This includes individuals investing on behalf of
a person under the age of 18.
A certified copy of either a:
„„ current passport
„„ current driver licence.
If you’re investing as joint applicants, all of
you need to sign the application form. We’ll
consider your certificates are held as joint
tenants, which means one of you can operate
the account and give notices that binds others
for future transactions unless you indicate on
the form (Section F) that joint signatures are
required for notices and instructions for your
certificates.
Australian
company
Companies incorporated in Australia that are:
„„ listed on the ASX
„„ proprietary company (ending with Pty Ltd)
„„ public company (ending with Ltd)
„„ companies limited by guarantee (not for
profit companies).
1. A certified copy of one of the following:
„„ the certificate of incorporation
„„ the company registry records.
2. Private (unlisted) companies also need to provide a certified
copy of:
„„ the company share register
„„ a current passport or driver licence for at least two
directors (or the sole director).
3. For proprietary companies, if an entity or person owns more
than 25% of the company, please attach the documents they
would have needed to provide if they were investing too. For
example if an individual owns more than 25%, please attach
the documents required in the ‘Individual’ section above.
dbaccess certificates
43
Investor
Description
Supporting documents
Foreign company
Incorporated in a foreign jurisdiction with an
Australian branch.
1. A certified copy of one of the following:
„„ the certificate of incorporation
„„ the company registry records.
2. A certified copy of a current passport or driver licence for at
least two directors (or the sole director).
3. Any foreign registration identification.
4. Private (unlisted) companies also need to provide a certified
copy of the company share register.
5. For private companies, if an entity or person owns more
than 25% of the company, please attach the documents they
would have needed to provide if they were investing too. For
example if an individual owns more than 25%, please attach
the documents required in the ‘Individual’ section above.
Trustee
Investing as trustee on behalf of another.
The trust could be, for example, a super fund
(including a self-managed super fund), family
trust, deceased estate, managed investment
scheme, charitable trust or testamentary trust.
Use the documents listed above, depending on whether you are:
„„ an individual
„„ a company.
Trusts
As trustee, you’ll also need to provide
information about the trust as well as yourself.
1. Trust ABN
(includes super
funds)
2. ARSN or super fund registration number issued by ASIC
3. A certified extract of sections of trust deed showing nature of
trust and trustee details
4. Details of beneficiaries – individuals or classes of beneficiaries
(eg present and future descendents of John Smith)
5. For trusts, if an entity or person has more than 25% beneficial
ownership of the trust, please attach the documents they
would have needed to provide if they were investing too. For
example if an individual owns more than 25%, please attach
the documents required in the ‘Individual’ section above.
Partnership
Established by a partnership agreement/deed.
1. A certified copy of the partnership agreement
2. By at least two partners, a certified copy of a current passport
or driver licence
Association
(incorporated/
unincorporated)
Incorporated associations are registered by the
state, territory or country where they’re based.
Their rules include:
„„ not for profit
„„ appointment of a public officer
and committee
„„ profits, if any, can only be used to promote
non-profit objectives.
1. A certified copy or certified extract of the constitution or rules
of the association.
2. Incorporated associations also need to verify documentation
that they’ve received from ASIC or by the state, territory or
overseas body responsible for their incorporation.
3. By at least two officers, a certified copy of a current passport
or driver licence.
Unincorporated associations don’t have a
legal identity and can’t hold assets in their
own name, so must appoint individuals as
trustees, who own the assets for the benefit
of the association.
Registered co-op
Government body
Attorney
44
A structure owned and controlled by the
people it serves, who join together for a
common benefit. It’s a separate legal entity
(registered under the relevant state or territory
legislation) that provides services for its
members rather than making profits.
1. A certified copy or certified extract of the rules of
the co-operative.
A legal entity owned or controlled by a federal,
state or local government (eg universities, local
councils and statutory agencies)..
1. Proof of status as a government/state entity.
Someone authorised under a formal document
to act on behalf of the investor (eg a person
travelling could appoint an attorney to conduct
their business in their absence).
1. A certified copy of the power of attorney and identification of
the named attorneys per individual(s) above.
Income: Australian shares
series 8A & 8B/2011
2. A certified copy or certified extract of any register maintained
by the co-operative.
3. By at least two officers, a certified copy of a current passport
or driver licence.
2. Extract of statute establishing the entity.
3. By at least two officers, a certified copy of a current passport
or driver licence.
2. Each investor who appointed the attorney also needs to
provide the same identification as set out above depending on
the type of investor they are: individual, company, trustee etc.
Direct debit request service agreement
Direct debit arrangements are requests to deduct money from your financial institution account to pay for something.
Our direct debit user identification number is 389183. If you make a direct debit request (DDR) in your application
form, you’ll be bound by the terms below.
Drawing arrangements
If you’ve checked the direct debit request box in section B of the application form, we’ll debit your account for
amounts you permit us to debit from you (including the application amount, instalments and adviser service fees).
The debits will be made through the Bulk Electronic Clearing System (BECS) from your account held at the financial
institution you nominate in your application form. If the debit day falls on a day that’s not a business day, we’ll debit
your account on the following business day. We may vary the details of this agreement or a DDR at any time, giving
you at least 14 days’ written notice.
We’ll keep any information (including your account details) in your DDR confidential. We’ll keep this information
secure and ensure our employees, contractors or agents with access to it don’t use, modify, reproduce or disclose it in
an unauthorised way.
Changes
You can change, stop or defer a debit payment, or terminate this agreement by giving us 14 days’ notice by:
„„
calling
1800 634 850
„„
emailing deutsche@boardroomlimited.com.au
„„
writing to Deutsche Managed Investments Limited
c/- Boardroom Pty Limited
GPO Box 3993 Sydney NSW 2001
„„
arranging it through your financial institution.
Disputes
You should check your account statement to verify the amounts debited are correct. If there’s an error, you should
write to us or contact your financial institution.
If we agree your account was incorrectly debited, we’ll adjust your account (including any interest or charges
incurred). We’ll also write to you stating the amount of the adjustment. If we conclude the debit was correct, we’ll give
you our reasons in writing.
What you need to do
You need to ensure:
„„
your nominated account accepts direct debits (your financial institution can confirm this)
„„
your account details are correct
„„
there are enough funds in your account to allow a debit payment according to the DDR
If there aren’t enough funds in your account when we debit your account, or you give us incorrect account details, you
may be charged a fee or interest by your financial institution. You may also incur fees or charges imposed or incurred
by us.
dbaccess certificates
45
46
Income: Australian shares
series 8A & 8B/2011
Call 1800 634 850 if you have any questions about this form
Application
dbaccess certificates
Income: Australian shares – series 8A & 8B/2011
This application is part of the PDS issued by Deutsche Managed Investments Limited ABN 55 118 336 584 AFSL 330531 (DMIL) on
23 September 2011.
If you’d like to invest, complete this form by printing in block letters, using a black or blue pen. Please select checkboxes by marking
X. You need to complete sections marked with an *. If there isn’t enough room on the form please attach another page. Send your
application and supporting documents to:
Deutsche Managed Investments Limited
c/- Boardroom Pty Limited
GPO Box 3993 Sydney NSW 2001
A reference to you or your is to the applicant completing this form. When we refer to we, us or our, we mean DMIL (and our agents
or service providers, including Boardroom Pty Limited ABN 14 003 209 836).
Section A: Application amount*
The minimum investment for each series is 10,000 certificates, and in multiples of 1,000 above that.
series A
series B
total application amount
Number of certificates (eg 25,000)
Application amount
equal to number of certificates x issue price
25,000 x $1.00 = $25,000
$
$
$
Section B: Payment details*
Application amount
Please X the box to indicate how you’ll pay your application amount. If you’d like to use the direct debit facility, you’ll be bound by the
direct debit request service agreement in the ‘How to apply’ section of the PDS.
cheque
Please make cheques payable to Deutsche Managed Investments Limited. We only accept cheques drawn from the applicant’s
account (not third parties).
drawer
BSB
cheque number
$
cheque amount
direct debit request
You request and authorise us (direct debit user identification number 389183) to debit your account (details below) using the direct
debit facility through the Bulk Electronic Clearing System with the following amounts:
„„ application amount
„„ adviser service fees (upfront and ongoing) as specified in section A of this form (if applicable)
„„ ongoing instalments of the issue price (if applicable), and
„„ any other amounts payable to us on the certificates.
Australian bank account details*
This account will be used if:
we need to pay you any money
„„ you’ve asked us to debit your application amount
„„ you’ve asked us to debit your adviser service fees (upfront and ongoing)
„„ you’ve asked us to debit any amounts due on the certificates after issue (for example, instalments).
„„
This must be an account in your name (not a third party). Joint investors will need to provide an account in both names.
name of financial institution
account number
branch
account name
BSB
dbaccess certificates
47
Call 1800 634 850 if you have any questions about this form
Section C: Applicant details*
new investor
current holder of a dbaccess certificate
account name
account number
Which parts do you fill out?
Part
Investor
1
Individual(s)

Joint investors

Individual(s) acting as trustee(s) of a trust or super fund

2
3



Company

Company acting as corporate trustee of a trust or super fund





Partnership


Association


Registered co-operative


Government body


Part 1: Individual, joint individual investors or individual trustees
Investor 1
If you’re investing jointly, we’ll send all communications to investor 1.
title
last name*
given name(s)*
DOB*
nationality*
country of residence if not Australia*
occupation*
If you’re not working, please write the source of the funds you will be investing eg
inheritance/former occupation.
residential address*
unit no
building name
street no
street name
suburb
state
post code
country
daytime contact number
email
mobile
Investor 2
title
last name*
given name(s)*
DOB*
nationality*
country of residence if not Australia*
occupation*
If you’re not working, please write the source of the funds you will be investing
eg inheritance/former occupation.
residential address*
48
4
unit no
building name
street no
street name
suburb
state
post code
country
daytime contact number
email
Income: Australian shares
series 8A & 8B/2011
mobile
Call 1800 634 850 if you have any questions about this form
Part 2: Company details (including for corporate trustees)
company name*
company type* (proprietary/public/listed)
registration number* (ABN/ARSN/ACN)
country of registration*
industry*
registered address*
unit no
building name
street no
street name
suburb
state
post code
country
daytime contact number
email
mobile
Please complete for directors and company secretary (if applicable).*
name
DOB
name
DOB
name
DOB
name
DOB
name
DOB
name
DOB
For unlisted companies, please complete for shareholders who own more than 25% of the issued capital.*
name
DOB
nationality
DOB
nationality
DOB
nationality
address
name
address
name
address
Part 3: Other (including trusts/partnerships/super funds)
full name*
ABN (if applicable)
country of registration*
super fund registration number/
registration number/ARSN*
type of entity*
industry*
registered address*
unit no
building name
street no
street name
suburb
state
post code
country
daytime contact number
email
mobile
dbaccess certificates
49
Call 1800 634 850 if you have any questions about this form
Please complete for partners (for partnerships) or officers (for other entities).*
name
DOB
nationality
DOB
nationality
DOB
nationality
DOB
nationality
DOB
nationality
address
name
address
name
address
name
address
name
address
Please complete for people with more than 25% beneficial ownership of the entity.*
name
DOB
nationality
DOB
nationality
DOB
nationality
address
name
address
name
address
Part 4: Postal address
PO box
unit no
building name
street no
street name
suburb
state
post code
country
50
Income: Australian shares
series 8A & 8B/2011
Call 1800 634 850 if you have any questions about this form
Section D: Privacy
If you don’t want to receive communications on other matters (see
Privacy Statement below) please X this box.
Personal information is collected on this form by Boardroom
Pty Limited as our registrar to maintain registers of investors;
facilitate payments, reporting and other corporate actions and
communications for us; and for other related purposes. If you
don’t give the information, we might not be able to process
your application.
Your personal information might be disclosed in Australia and
overseas to DMIL, Deutsche Bank AG and its subsidiaries and
employees, contractors, distributors, advisers, agents and other
service providers to perform services, and to communicate
with you about this investment and other financial services or
products that might interest you. Your personal information
may also be disclosed to third parties authorised by you, such
as your advisers or a person holding a security interest in the
certificates. If you completed a direct debit authority in part
B of this form, your personal information may be disclosed to
banks to conduct anti-money laundering and counter-terrorism
financing checks, administer the direct debit, or for any other
acts you authorised relating to the direct debit. We may also
disclose your personal information to others: as permitted under
the Privacy Act 1988 (Cwth); to conduct anti-money laundering
and counter-terrorism financing checks; or as required by
law, any regulatory or government authority, court, tribunal or
securities exchange. By completing this form you consent to the
disclosure of your information as described above. To read the
privacy policy for Boardroom Pty Limited visit
www.boardroomlimited.com.au/privacy.html, and
for Deutsche Bank and its subsidiaries visit
www.australia.db.com/australia/content/privacy_policy.html.
If you’d like to access your personal information or if any of your
personal information is incorrect or has changed, please email
privacyofficer@boardroomlimited.com.au or write to:
The Privacy Officer
Boardroom Pty Limited
GPO Box 3993
Sydney NSW 2001
Section E: Mortgages, security interests and investment lending
Complete this section if:
you’ve granted (or propose to grant to a lender or other person), a mortgage or other security interest over some or all of the certificates
that may be issued to you, and
„„ you want us to note their interest in the certificates and follow their instructions.
„„
If you complete the box below and sign this form, you’re agreeing to the following provisions. If you do, they will apply to all the certificates
we issue to you (or you acquire) under this PDS (even if they aren’t covered by a mortgage or other security interest).
name of lender/security interest holder
Please complete for us to pay you any money (if different from the details in section B), unless the lender/security interest holder instructs
us otherwise.
name of financial institution
account number
branch
account name
BSB
registered address of lender/security interest holder
unit no
building name
street no
suburb
state
post code
daytime contact number
email
Authorisations
country
mobile
„„
When we refer to lender in this section, we mean the investment
loan provider or other security interest holder named above.
By signing this form, you agree to the following. You can’t change
your mind once you’ve agreed, and your authorisation will continue
to apply:
„„ to all certificates that may be issued to you (or transferred to you)
under this PDS even if some of your certificates aren’t the subject
of a mortgage or other security interest to the lender
„„ in addition to other authorisations we receive. Examples include
instructions we receive from the lender in its own capacity or as
your agent. The provisions in this section E aren’t restricted by
other authorisations (for example, if other authorisations have
narrower provisions), and
street name
until we receive written notice we reasonably believe is from the
lender (and in a form we accept) stating the lender no longer
wants its interest noted on the register and no longer wants to
give instructions on the certificates. These terms apply until we
receive this notice, even if the lender no longer has an interest
over, or other rights to, the certificates. In these circumstances,
it’s up to you to make sure the lender contacts us.
You authorise us to:
disclose information about you and your investment to the lender
(including giving it copies of notices sent to you).
„„ act on all instructions relating to your certificates that we
reasonably believe come from the lender. Examples include:
—— paying or delivering assets to the lender (or a third party)
—— making withdrawals
—— transferring certificates
—— selling the delivery assets at maturity
„„
dbaccess certificates
51
Call 1800 634 850 if you have any questions about this form
—— updating your personal details (such as your address)
—— amending the bank account details to be used for making
payments relating to the certificates (including to bank
accounts that aren’t in your name)
—— updating details of the certificates on the register (including
noting the lender’s security interest)
—— amending your application form (apart from increasing the
application amount or any fees or commissions)
—— ignoring instructions from anyone other than the lender
about your certificates. This means we can ignore
your instructions.
By signing this form, you agree that if we act on any instructions we
reasonably believe came from the lender:
„„ it’s binding for you
„„ our action/s satisfy any obligation we’d otherwise have to you
(for example, to pay or deliver assets to you)
„„ you release us from all liability from following the
instruction, and
„„ if the instruction didn’t come from the lender, these provisions
apply as long as we reasonably believe it did.
Section F: Applicant declaration and signature*
By signing this form, you represent that:
Capacity
You have full legal capacity. Attorneys signing this form represent
their power hasn’t been revoked.
You aren’t bankrupt or insolvent.
You received this PDS and FSG in Australia.
Binding terms
You’ve read and understood both parts of this PDS, FSG and
application form and agree to be bound by the terms in them.
Investment decision
Unless a Deutsche Bank financial adviser is your approved adviser
for this investment, you:
„„ decided to invest based on this PDS, and not on any sales or
promotional material provided by us or our related parties
„„ accept that your financial adviser and dealer group, legal or tax
adviser aren’t agents or partners of ours or our related parties
„„ acknowledge you haven’t received any advice (legal, tax,
investment or otherwise) from us, or anyone on our behalf,
about the certificates (including the tax implications of
borrowing to invest in the certificates).
You haven’t treated this PDS or FSG as investment or tax advice
and that any examples are illustrative only. In particular, that past
performance is not a reliable indicator of future results.
You acknowledge that we strongly recommend you seek
independent legal, financial and tax advice. If you haven’t sought
advice, you acknowledge you understand the obligations and risks
associated with investing in the certificates and borrowing to invest.
Not a guarantee
You understand and acknowledge that the certificates:
„„ carry risk and their performance or repayment of capital isn’t
guaranteed by us, Deutsche Bank or any other entity
„„ aren’t a deposit of ours and don’t represent a deposit with or
other liability of Deutsche Bank.
Applications
You understand you can’t withdraw your application.
You acknowledge that acceptance of your application and the
allocation of certificates will be in our discretion and we can allocate
you a lower number of certificates than what you applied for.
You agree to accept the number of certificates allocated to you,
even if it’s less than the number you applied for.
You acknowledge that all information given to us, including in
this application is true, correct and complete as of the date of this
application and agree to notify us as soon as practicable if any of
the information changes.
52
Income: Australian shares
series 8A & 8B/2011
Direct debit
If you selected direct debit request as the payment method
in section B you are bound by the direct debit request service
agreement in the ‘How to apply’ section of the PDS.
You authorise us to debit your account with any amounts due on
your certificates. You:
„„ authorise us to debit your account with the fees you selected in
section A (if applicable)
„„ understand that if there aren’t enough funds in your account
when we debit your account or you give us incorrect
account details, you may be charged a fee or interest by your
financial institution
„„ agree to pay any fees or charges we may impose if there aren’t
enough funds in your account when we debit your account, or
you give us incorrect account details.
Withdrawals
You know that we aren’t required to accept your withdrawal request
if you want to withdraw.
Maturity
You agree that:
„„ we, Deutsche Bank or our nominee, will transfer you delivery
assets in accordance with this PDS unless you ask us to sell the
delivery assets on your behalf, and
„„ if we do this or otherwise satisfy our obligations to you, we’ll
have no further obligations to you.
You appoint us (and any agent we delegate to) as your attorney
to do anything required to transfer the delivery assets to you.
Examples include:
„„ signing any instruments of transfer,
„„ instructing the issuer of delivery assets (or their agents) to
record you as the owner of the delivery assets, and
„„ agreeing on your behalf to be a member of the issuer of delivery
assets and to be bound by the constituent documents and any
terms and conditions of the delivery assets.
Privacy
You agree that we can obtain information about you from third
parties to meet our obligations under anti-money laundering and
counter-terrorism financing and tax laws in force, from time to time.
You accept we’ll provide information related to your investment
to your financial adviser (listed on this application form) and other
persons described in section D (privacy).
Mortgages, security interests and investment lending
You acknowledge that, if you’ve completed section E (mortgages,
security interests and investment lending):
„„ we can ignore instructions from anyone other than the lender
(including you) about your certificates
„„ the instructions we receive from the lender might impact you
(for example, early withdrawal might mean your withdrawal
price is less than the issue price). We aren’t obliged to consider
whether an instruction is appropriate. This is between you and
the lender, and
„„ the tax implications of borrowing to invest in the certificates
are complex and you understand that interest might not be
deductible in whole or in part.
Notices by fax
You acknowledge there’s a risk that a third party could fraudulently
fax a request using your name.
You agree that we aren’t responsible for any fraudulent
communications. You won’t ask us to compensate you for any
losses resulting from the fraudulent communications.
You release and indemnify us against any liabilities because we
acted on faxed communications from you or appeared to be
from you.
Call 1800 634 850 if you have any questions about this form
Signature*
Joint investors
Company
Company acting as trustee
Attorney
You both need to sign
Two company directors need to sign (unless the company has a sole director)
Two company directors need to sign (unless the company has a sole director)
Please attach a copy of the power of attorney.
signature 1
please print name
individual
trustee
director
attorney
trustee
director
attorney
trustee
director
attorney
trustee
director
attorney
signature 2
date signed
sole director
please print name
individual
signature 3
date signed
sole director
please print name
individual
signature 4
date signed
sole director
please print name
individual
date signed
sole director
Please X here if you’ll require joint signatures to give instructions and for future transactions and notifications for your certificates.
To be completed by your financial adviser*
adviser name
adviser ABN
company name
suburb
state
postcode
business phone number
fax number
authorised representative number
dealer group/licensee
dealer ABN
date
adviser address
dealer group/adviser stamp/signature
Adviser commission
Please nominate the amount of adviser commission to be waived.1 If an adviser waives their commission you’ll get more
certificates based on the GST exclusive amount waived.
0%
0.5%
1%
1.5%
2%
If you don’t make a selection, no waiver will be assumed.
1
The nominated commission waived excludes 10% GST (eg 1% means commission waived is 1.1%, including GST).
By signing and returning this form, the adviser:
agrees that for any supplies they make in consideration of you paying them a fee (which we collect on behalf of the adviser), the adviser
will issue tax invoices to you
„„ agrees that for any supplies they make in consideration of Deutsche Bank paying them a commission, Deutsche Bank can issue
recipient created tax invoices (RCTI) and the adviser won’t issue tax invoices
„„ represents they are registered for GST and will notify Deutsche Bank if they cease to be registered at any time before maturity
„„ acknowledges that we and Deutsche Bank (unless the adviser is a Deutsche Bank financial adviser):
—— aren’t agents (other than being the collection agent for adviser service fees, if any) or partners of the adviser, and
—— aren’t responsible for advice the adviser gave or gives to you
„„ agrees to indemnify Deutsche Bank and us against any claims or loss in connection with advice they gave to you
„„ acknowledges that we and Deutsche Bank;
—— aren’t agents or partners of the distributor (if any) listed in ‘Offer summary’ section of the PDS, and
—— aren’t responsible for advice the distributor gave or gives to the adviser or anyone else.
„„
dbaccess certificates
53
Issuer
Deutsche Managed Investments Limited
Deutsche Bank Place
Level 16
Cnr Hunter and Phillip Streets
Sydney NSW 2000
Registry
Boardroom Pty Limited
GPO Box 3993
Sydney NSW 2001
deutsche@boardroomlimited.com.au
Website
www.dbaccess.db.com
Information
1800 634 850
Email
deutsche@boardroomlimited.com.au